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DENR Administrative OrderNo. 96- 40December 19, 1996

SUBJECT: Revised Implementing Rules andRegulations of Republic Act No. 7942,Otherwise Known as the "PhilippineMining Act of 1995"

Pursuant to Section 8 of Republic Act (R.A.) No. 7942,otherwise known as the "Philippine Mining Act of 1995", the followingrevised rules and regulations are hereby promulgated for the guidanceand compliance of all concerned.

CHAPTER IINTRODUCTORY PROVISIONS

Section 1. Title

The title of this Administrative Order shall be "RevisedImplementing Rules and Regulations of R.A. 7942, otherwise known asthe Philippine Mining Act of 1995".

Section 2. Declaration of PolicyAll mineral resources in public and private lands within the

territory and exclusive economic zone of the Republic of the Philippinesare owned by the State. It shall be the responsibility of the State topromote their rational exploration, development, utilization andconservation through the combined efforts of the Government andprivate sector in order to enhance national growth in a way thateffectively safeguards the environment and protects the rights of affectedcommunities.

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Section 3. Governing PrinciplesIn implementing the policy stated in the preceding Section, the

Department shall adhere to the principle of sustainable developmentwhich meets the needs of the present without compromising the abilityof the future generations to meet their own needs, with the view ofimproving the total quality of life, both now and in the future.Consequently:

a. Mineral resource exploration, development,utilization and conservation shall be governedby the principle of sustainable mining, whichprovides that the use of mineral wealth shall bepro-environment and pro-people in sustainingwealth creation and improved quality of lifeunder the following terms:1. Mining is a temporary land use for the

creation of wealth which leads to anoptimum land use in the post-miningstage as a result of progressive andengineered mine rehabilitation workdone in cycle with mining operations;

2. Mining activities must always be guidedby current best practices inenvironmental management committedto reducing the impacts of mining andeffectively and efficiently protecting theenvironment;

3. The wealth accruing to the Governmentand communities as a result of miningshould also lead to other wealth-generating opportunities for people andto other environment-responsibleendeavors;

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4. Mining activities shall be undertakenwith due and equal emphasis oneconomic and environmentalconsiderations, as well as for health,safety, social and cultural concerns; and

5. Conservation of minerals is effected notonly through recycling of mineral-basedproducts to effectively lengthen theusable life of mineral commodities butalso through the technological efficiencyof mining operations.

b. Investments in commercial mining activities fromboth domestic and international sources shall bepromoted in accordance with State policies andthe principles and objectives herein stated.

c. The granting of mining rights shall harmonizeexisting activities, policies and programs of theGovernment that directly or indirectly promoteself-reliance, development and resourcemanagement. Activities, policies and programsthat promote community-based, community-oriented and processual development shall beencouraged, consistent with the principles ofpeople empowerment and grassrootsdevelopment.

These principles are implemented through the specificprovisions of these implementing rules and regulations.

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Section 4. Objectives

These rules and regulations are promulgated toward theattainment of the following objectives:

a. To promote the rational exploration,development, utilization and conservation ofmineral resources under the full control andsupervision of the State;

b. To enhance the contribution of mineralresources to economic recovery and nationaldevelopment, with due regard to the protectionof the environment and the affectedcommunities, as well as the development oflocal science and technical resources;

c. To encourage investments in exploration andcommercial mining activities to assure a steadysupply of minerals and metals for material needsof both present and future society and togenerate wealth in terms of taxes, employmentgeneration, foreign exchange earnings andregional development;

d. To promote equitable access to economicallyefficient development and fair sharing of benefitsand costs derived from the exploration,development and utilization of mineralresources; and

e. To enable the Government and the investor torecover their share in the production, utilizationand processing of minerals to attain sustainabledevelopment with due regard to theenvironment, social equity and fair return ofinvestment.

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Section 5. Definition of TermsAs used in and for purposes of these rules and regulations, the

following terms shall mean:a. "Act" refers to R.A. No. 7942 otherwise known as the

"Philippine Mining Act of 1995."b. "Ancestral Lands" refer to all lands exclusively and

actually possessed, occupied or utilized by IndigenousCultural Communities by themselves or through theirancestors in accordance with their customs andtraditions since time immemorial, and as may be definedand delineated by law.

c. "Annual Environmental Protection and EnhancementProgram (AEPEP)" refers to a yearly environmentalmanagement work plan based on the approvedenvironmental protection and enhancement strategy.

d. "Archipelagic Sea" refers to all waters within thebaseline of an archipelago except internal waters suchas roadsteads, lakes and rivers.

e. "Block or Meridional Block" means an area, boundedby one-half (1/2) minute of latitude and one-half (1/2)minute of longitude, containing approximately eighty-one (81) hectares.

f. "Built-up Areas" refer to portions of land within themunicipality or barangay actually occupied asresidential, commercial or industrial areas as embodiedin a duly approved land use plan by the appropriateSanggunian.

g. "Bureau" means the Central Office of the Mines andGeosciences Bureau under the Department.

h. "City" refers to an independent component city asclassified under the Local Government Code.

i. "Commercial Production" refers to the production ofsufficient quantity of minerals to sustain economic

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viability of mining operations reckoned from the date ofcommercial operation as declared by the Contractor oras stated in the feasibility study, which ever comes first.

j. "Community Relations Record" refers to the applicant'sproof of its community relations which may consist, butis not limited to, sociocultural sensitivity, the characterof its past relations with local communities, culturalappropriateness and social acceptability of its resourcemanagement strategies: Provided, That this shall not berequired in cases where the applicant has no previouscommunity-relations experience in resource useventures, locally or internationally.

k. "Conservation" means the wise use and optimumutilization of mineral resources.

l. "Contiguous Zone" refers to water, sea bottom andsubstratum measured twenty-four (24) nautical milesseaward from the baseline of the PhilippineArchipelago.

m. "Contract Area" means the land or body of waterdelineated under a Mineral Agreement or FTAAsubject to the relinquishment obligations of theContractor and properly defined by longitude andlatitude.

n. "Contractor" means a Qualified Person acting alone orin consortium who is a party to a Mineral Agreement orFTAA.

o. "Critical Watershed" refers to a drainage area of a riversystem, lake or water reservoir supporting existing andproposed hydroelectric power, domestic water supply,geothermal power and irrigation works, which needsimmediate rehabilitation and protection to minimize soilerosion, improve water yield and prevent possibleflooding.

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p. "DENR Project Area" refers to specific portions of landcovered by an existing project of the Department suchas, but not limited to, Industrial Forest ManagementAgreement (IFMA), Community Forest ManagementAgreement (CFMA), Community Forestry Program(CFP), Forest Land Management Agreement (FLMA)and Integrated Social Forestry Program (ISFP).

q. "Department" means the Department of Environmentand Natural Resources of the Republic of thePhilippines.

r. "Development" means the work undertaken to exploreand prepare an orebody or a mineral deposit for mining,including the construction of necessary infrastructureand related facilities.

s. "Development Stage" as used exclusively for FTAAsmeans the period to prepare an explored orebody ormineral deposit for mining including the construction ofnecessary infrastructure and related facilities.

t. "Director" means the Director of the Bureau.u. "Ecological Profile or Eco-Profile" refers to geographic-

based instruments for planners and decision-makers,which presents a description of the environmentalsetting including the state of environmental quality andevaluation of the assimilative capacity of an area.

v. "Effluent" means any wastewater, partially or completelytreated, or any waste liquid flowing out of miningoperations, wastewater treatment plants or tailingsdisposal system.

w. "Environment" refers to the physical factors of the totalsurroundings of human beings, including the land, water,atmosphere, climate, sound, odors, tastes, the biologicalfactors of animals and plants and the social factors ofaesthetics. In a broad sense, it shall include the total

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environment of human beings such as economic, social,cultural, political and historical factors.

x. "Environmental Audit" refers to a systematic, documentedverification process of objectively obtaining and evaluatingaudit evidence (verifiable information, records or statementsof facts) to determine whether or not specifiedenvironmental activities, events, conditions, managementsystems or information about these matters conform withaudit criteria (policies, practices, procedures orrequirements against which the auditor compares collectedaudit evidence about the subject matter) and communicatingthe results of this process to the concerned stakeholders.

y. "Environmental Compliance Certificate (ECC)" refers to thedocument issued by the Secretary or the Regional ExecutiveDirector certifying that based on the representations of theproponent and the preparers (the proponent's technical staffor the competent professional group commissioned by theproponent to prepare the EIS and other relateddocuments), as reviewed and validated by theEnvironmental Impact Assessment Review Committee(EIARC), the proposed project or undertaking will notcause a significant negative environmental impact; that theproponent has complied with all the requirements of theEnvironmental Impact Assessment System; and that theproponent is committed to implement its approvedEnvironmental Management Plan in the EnvironmentalImpact Statement or mitigation measures in the InitialEnvironmental Examination.

z. "Environmental Impacts" refer to the probable effects orconsequences of proposed projects or undertakings on thephysical, biological and socioeconomic environment that

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can be direct or indirect, cumulative and positive ornegative.

aa. "Environmental Impact Assessment (EIA)" refers to theprocess of predicting the likely environmentalconsequences of implementing projects or undertakingsand designing appropriate preventive, mitigating andenhancement measures.

ab. "Environmental Impact Statement (EIS)" refers to thedocument(s) of studies on the environmental impacts ofa project including the discussions on direct and indirectconsequences upon human welfare and ecological andenvironmental integrity. The EIS may vary from projectto project but shall contain in every case all relevantinformation and details about the proposed project orundertaking, including the environmental impacts of theproject and the appropriate mitigating and enhancementmeasures.

ac. "Environmental Management Record" refers to anapplicant's high regard for the environment in its pastresource use ventures and proof of its present technicaland financial capability to undertake resourceprotection, restoration and/or rehabilitation of degradedareas and similar activities: Provided, That this shall notbe required in cases where the applicant has noprevious experience in resource use ventures, locally orinternationally.

ad. "Environmental Protection and Enhancement Program(EPEP)" refers to the comprehensive and strategicenvironmental management plan for the life of the miningproject on which AEPEPs are based and implementedto achieve the environmental management objectives,criteria and commitments including protection andrehabilitation of the disturbed environment.

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ae. "Environmental Work Program (EWP)" refers to thecomprehensive and strategic environmental managementplan to achieve the environmental managementobjectives, criteria and commitments includingprotection and rehabilitation of the disturbedenvironment during the exploration period.

af. "Exclusive Economic Zone" refers to the water, seabottom and subsurface measured from the baseline ofthe Philippine Archipelago up to two hundred (200)nautical miles offshore.

ag. "Exploration" means searching or prospecting formineral resources by geological, geochemical and/orgeophysical surveys, remote sensing, test pitting,trenching, drilling, shaft sinking, tunneling or any othermeans for the purpose of determining their existence,extent, quality and quantity and the feasibility of miningthem for profit.

ah. "Financial or Technical Assistance Agreement (FTAA)"means a contract involving financial or technicalassistance for large-scale exploration, development andutilization of mineral resources.

ai. "Force Majeure" means acts or circumstances beyondthe reasonable control of Contractor/PermitHolder/Permittee/Lessee including, but not limited to,war, rebellion, insurrection, riots, civil disturbance,blockade, sabotage, embargo, strike, lockout, anydispute with surface owners and other labor disputes,epidemic, earthquake, storm, flood or other adverseweather conditions, explosion, fire, adverse action byGovernment or by any instrumentality or subdivisionthereof, act of God or any public enemy and any causeas herein described over which the affected party hasno reasonable control.

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aj. "Foreign-owned Corporation" means any corporation,partnership, association or cooperative duly registeredin accordance with law in which less than fifty percent(50%) of the capital is owned by Filipino citizens.

ak. "Forest Reservations" refer to forest lands which havebeen reserved by the President for any specific purposeor purposes pursuant to P.D. No. 705, or by anappropriate law.

al. "Forest Reserves or Permanent Forests" refer to thoselands of the public domain which have been the subjectof the present system of classification and determined tobe needed for forest purposes pursuant to P.D. No.705.

am. "Government" means the Government of the Republicof the Philippines.

an. "Government Reservations" refer to all proclaimedreserved lands for specific purposes other than MineralReservations.

ao. "Gross Output" means the actual market value ofminerals or mineral products from each mine or mineralland operated as a separate entity, without anydeduction for mining, processing, refining, transporting,handling, marketing or any other expenses: Provided,That if the minerals or mineral products are sold orconsigned abroad by the Contractor under C.I.F.terms, the actual cost of ocean freight and insuranceshall be deducted: Provided, further, That in the caseof mineral concentrates which are not traded incommodity exchanges in the Philippines or abroad, suchas copper concentrates, the actual market value shall bethe world price quotations of the refined mineralproducts content thereof prevailing in the saidcommodity exchanges, after deducting the smelting,

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refining, treatment, insurance, transportation and othercharges incurred in the process of converting mineralconcentrates into refined metal traded in thosecommodity exchanges.

ap. "Ground Expenditures" mean the field and laboratoryexpenditures incurred for searching and delineating newor extension of orebodies in an approved FTAA area,including expenditures for social preparation, pre-feasibility studies and reasonable administrativeexpenses incurred for the FTAA project. Suchexpenses include those for geological, geophysical,geochemical and air-borne geophysical surveys,borehole drillings, tunneling, test pitting, trenching andshaft sinking. Contributions to the community andenvironment-related expenses during the explorationperiod shall form part of the ground expenditures.

aq. "Indigenous Cultural Community" means a group ortribe of indigenous Filipinos who have continuously livedas communities on communally-bounded and definedland since time immemorial and have succeeded inpreserving, maintaining and sharing common bonds oflanguages, customs, traditions and other distinctivecultural traits, and as may be defined and delineated bylaw.

ar. "Initial Environmental Examination (IEE)" refers to thedocument required of proponents describing theenvironmental impact of, and mitigation andenhancement measures for projects or undertakingslocated in an Environmentally Critical Area (ECA) aslisted under Presidential Proclamation No. 2146, Seriesof 1981, as well as other areas which the President mayproclaim as environmentally critical in accordance withSection 4 of P.D. No. 1586.

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as. "Lessee" means a person or entity with a valid andexisting mining lease contract.

at. "Metallic Mineral" means a mineral having a brilliantappearance, quite opaque to light, usually giving a blackor very dark streak, and from which a metallicelement/component can be extracted/utilized for profit.

au. "Mill Tailings" means materials whether solid, liquid orboth segregated from the ores duringconcentration/milling operations which have no presenteconomic value to the generator of the same.

av. "Minerals" refer to all naturally occurring inorganicsubstances in solid, liquid, gas or any intermediate stateexcluding energy materials such as coal, petroleum,natural gas, radioactive materials and geothermalenergy.

aw. "Mineral Agreement" means a contract between theGovernment and a Contractor, involving MineralProduction Sharing Agreement, Co-ProductionAgreement or Joint Venture Agreement.

ax. "Mineral Land" means any area where mineralresources, as herein defined, are found.

ay. "Mineral Processing" means the milling, beneficiation,leaching, smelting, cyanidation, calcination or upgradingof ores, minerals, rocks, mill tailings, mine waste and/orother metallurgical by-products or by similar means toconvert the same into marketable products.

az. "Mineral Processing Permit" refers to the permit grantedto a Qualified Person for mineral processing.

ba. "Mineral Products" mean materials derived from ores,minerals and/or rocks and prepared into a marketablestate by mineral processing.

bb. "Mineral Reservations" refer to areas established andproclaimed as such by the President upon the

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recommendation of the Director through the Secretary,including all submerged lands within the contiguous zoneand Exclusive Economic Zone.

bc. "Mineral Resources" mean any concentration of ores,minerals and/or rocks with proven or potentialeconomic value.

bd. "Mine Rehabilitation" refers to the process used torepair the impacts of mining on the environment. Thelong-term objectives of rehabilitation can vary fromsimply converting an area to a safe and stable conditionto restoring the pre-mining conditions as closely aspossible with all the area's environmental values intactand establishing a land use capability that is functionaland proximate to the land use prior to the disturbanceof the mine area.

be. "Mine Waste" means soil and/or rock materials fromsurface or underground mining operations with nopresent economic value to the generator of the same.

bf. "Mining Area" means a portion of the contract areaidentified by the Contractor as defined and delineated ina Survey Plan duly approved by the Director/concernedRegional Director for purposes of development and/orutilization, and sites for support facilities.

bg. "Mining Operations" mean mining activities involvingexploration, feasibility study, development andutilization.

bh. "Mining Permits" include Exploration, Quarry, Sand andGravel (Commercial, Industrial and Exclusive),Gratuitous (Government or Private), Guano, GemstoneGathering and Small-Scale Mining Permits.

bi. "Mining Right" means a right to explore, develop orutilize mineral resources.

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bj. "Mining Application" means any application for miningpermit, Mineral Agreement or FTAA.

bk. "Net Income" means gross income from operations lessallowable deductions which are necessary or related tomining operations.

bl. "Nonmetallic Mineral" refers to a mineral usually havinga dull luster, generally light-colored, transmits light,usually giving either colorless or light colored streakfrom which a nonmetallic element/component can beextracted/utilized for a profit.

bm. "Nongovernmental Organization (NGO)" includesnonstock, nonprofit organizations with qualifications,expertise and objectivity in activities dealing withresource and environmental conservation, managementand protection.

bn. "Offshore" means the water, sea bottom and subsurfacefrom the shore or coastline reckoned from the meanlow tide level up to the two hundred (200) nauticalmiles of the Exclusive Economic Zone.

bo. "Onshore" means the landward side from the mean lowtide level, including submerged lands in lakes, rivers andcreeks.

bp. "Ore" means naturally occurring substance or materialfrom which a mineral or an element can be minedand/or processed for profit.

bq. "Ore Transport Permit" refers to the permit that may begranted to a Contractor, accredited dealer, retailer,processor and other Permit Holders to transportminerals/mineral products.

br. "People's Organization (PO)" refers to a group ofpeople which may be an association, cooperative,federation or other legal entity established by thecommunity to undertake collective action to address

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community concerns and need and mutually share thebenefits from the endeavor.

bs. "Permittee" means the holder of an Exploration Permit.The Permittee referred to in previous administrativeorders shall mean holders of permits subject of suchorders.

bt. "Permit Area" refers to area subject of mining permits.bu. "Permit Holder" means a holder of any mining permit

issued under these implementing rules and regulationsother than Exploration Permit.

bv. "Pollution" refers to any alteration of the physical,chemical and/or biological properties of any water, airand/or land resources of the Philippines; or anydischarge thereto of any liquid, gaseous or solid wastes;or any production of unnecessary noise or any emissionof objectionable odor, as will or is likely to create or torender such water, air and land resources harmful,detrimental or injurious to public health, safety orwelfare, or which will adversely affect their utilization fordomestic, commercial, industrial, agricultural,recreational or other legitimate purposes.

bw. "Pollution Control Devices and Facilities" refer toinfrastructure, machinery, equipment and/orimprovements used for impounding, treating orneutralizing, precipitating, filtering, conveying andcleansing mine industrial waste and tailings, as well aseliminating or reducing hazardous effects of solidparticles, chemicals, liquids or other harmful by-products and gases emitted from any facility utilized inmining operations for their disposal.

bx. "Pre-Operating Expenses" refer to all explorationexpenses, special allowance, administrative costsrelated to the project, feasibility and environmental

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studies and all costs of mine construction anddevelopment incurred prior to commercial production.

by. "President" refers to the President of the Republic of thePhilippines.

bz. "Private Land" refers to land belonging to any privateperson or entity which includes alienable and disposableland being claimed by a holder, claimant or occupantwho has already acquired a vested right thereto underthe law, including those whose corresponding certificateor evidence of title or patent has not been actuallyissued.

ca. "Public Land" refers to land of the public domain whichhas been classified as agricultural land, mineral land,forest or timber land subject to management anddisposition or concession under existing laws.

cb. "Qualified Person" means any Filipino citizen of legalage and with capacity to contract; or a corporation,partnership, association or cooperative organized orauthorized for the purpose of engaging in mining, withtechnical and financial capability to undertake mineralresources development and duly registered inaccordance with law, at least sixty percent (60%) of thecapital of which is owned by Filipino citizens: Provided,That a legally organized foreign-owned corporationshall be deemed a Qualified Person for purposes ofgranting an Exploration Permit, FTAA or MineralProcessing Permit only.

cc. "Quarrying" means the process of extracting, removingand disposing quarry resources found on or underneaththe surface of public or private land.

cd. "Quarry Permit" refers to the permit granted to aQualified Person for the extraction and utilization ofquarry resources on public or private land.

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ce. "Quarry Resources" refer to any common rock or othermineral substances as the Director may declare to bequarry 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, Thatsuch quarry resources do not contain metals or metallicconstituents and/or other valuable minerals ineconomically workable quantities: Provided, further,That nonmetallic minerals such as kaolin, feldspar, bullquartz, quartz or silica, sand and pebbles, bentonite,talc, asbestos, barite, gypsum, bauxite, magnesite,dolomite, mica, precious and semiprecious stones andother nonmetallic minerals that may later be discoveredand which the Director declares to be of economicallyworkable quantities, shall not be classified under thecategory of "Quarry Resources".

cf. "Regional Director" means the Regional Director of anyRegional Office.

cg. "Regional Office" means any of the Regional Offices ofthe Mines and Geosciences Bureau.

ch. "Secretary" means the Secretary of the Department.ci. "Service Contractor" means a person or entity who

enters into an agreement to undertake a specific workrelated to mining or quarrying operations of aContractor/Permit Holder/Permittee/Lessee.

cj. "Special Allowance" refers to payment to theclaimowner or surface right owners particularly duringthe transition period from P.D. No. 463 and ExecutiveOrder No. 279, Series of 1987.

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ck. "Stakeholders" refer to person(s)/entity(ies) who maybe significantly affected by the project or undertaking,such as but not limited to, Contractor/PermitHolder/Permittee/Lessee, members of the localcommunity industry, Local Government Units (LGUs),Nongovernmental Organizations (NGOs) and People'sOrganizations (POs).

cl. "State" means the Republic of the Philippines.cm. "Tailings Disposal System" refers to a combination of

methods, equipment and manpower used in handling,transporting, disposing and/or impounding mill tailings.

cn. "Waste Dump" refers to a designated place where themine waste are accumulated or collected.

co. "Utilization" means the extraction, mineral processingand/or disposition of minerals.

CHAPTER IIGOVERNMENT MANAGEMENT

Section 6. Authority of the Department

The Department is the primary Government agency responsiblefor the conservation, management, development and proper use of theState's mineral resources including those in reservations, watershedareas and lands of the public domain. The Department shall have thefollowing authority, among others:

a. To promulgate rules and regulations as may benecessary to implement the intent andprovisions of the Act;

b. To enter into Mineral Agreements on behalf ofthe Government or recommend FTAA to thePresident upon endorsement of the Director;

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c. To enforce applicable related laws such asAdministrative Code, Civil Code, etc.; and

d. To exercise such other authority vested by theAct and as provided for in these implementingrules and regulations.

The Secretary may delegate such authority and other powersand functions to the Director.

Section 7. Organization and Authority of the Bureau

The Mines and Geosciences Bureau shall be a line bureauprimarily responsible for the implementation of the Act pursuant toSection 100 thereof. It shall be comprised of a Central Office and thenecessary regional, district and such other offices as may be establishedin pertinent administrative orders issued by the Secretary. The staffBureau created under Department Administrative Order No. 1, Seriesof 1988, shall become the Central Office of the Mines and GeosciencesBureau while the Mines and Geosciences Development Servicescreated pursuant to Department Administrative Order No. 41, Series of1990, shall become the Regional Offices.

The Bureau shall have the following authority, among others:

a. To have direct charge in the administration anddisposition of mineral lands and mineralresources;

b. To undertake geological, mining, metallurgical,chemical and other researches, as well asmineral exploration surveys: Provided, That forareas closed to mining applications as providedfor in Section 15 hereof, the Bureau can

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undertake studies for purposes of research anddevelopment;

c. To confiscate, after due process, surety,performance and guaranty bonds after notice ofviolation;

d. To recommend to the Secretary the granting ofMineral Agreements or to endorse to theSecretary for action by the President the grantof FTAAs, in favor of Qualified Persons and tomonitor compliance by the Contractor with theterms and conditions of the Mineral Agreementsand FTAAs. For this purpose, an efficient andeffective monitoring system shall be establishedto ascertain periodically whether or not theseobjectives are realized;

e. To cancel or to recommend cancellation, afterdue process, mining rights, mining applicationsand mining claims for noncompliance withpertinent laws, rules and regulations;

f. To deputize, when necessary, any member orunit of the Philippine National Police (PNP) andbarangay, duly registered and Department-accredited Nongovernmental Organization(NGO) or any Qualified Person to police allmining activities;

g. To assist the Environmental ManagementBureau (EMB) under the Department and/orthe Department Regional Office in theprocessing or conduct of Environmental ImpactAssessment in mining projects; and

h. To exercise such other authority vested by theAct and as provided for in these implementingrules and regulations.

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The Director may delegate such authority and other powers andfunctions to the Regional Director.

Section 8. Role of Local Government

Subject to Section 8 of the Act and pursuant to the LocalGovernment Code and other pertinent laws, the Local GovernmentUnits (LGUs) shall have the following roles in mining projects withintheir respective jurisdictions:

a. To ensure that relevant laws on public notice,public consultation and public participation arecomplied with;

b. In coordination with the Bureau/RegionalOffice(s) and subject to valid and existingmining rights, to approve applications for small-scale mining, sand and gravel, quarry, guano,gemstone gathering and gratuitous permits andfor industrial sand and gravel permits notexceeding five (5) hectares;

c. To receive their share as provided for by law inthe wealth generated from the utilization ofmineral resources and thus enhance economicprogress and national development;

d. To facilitate the process by which thecommunity shall reach an informed decision onthe social acceptability of a mining project as arequirement for securing an EnvironmentalCompliance Certificate (ECC);

e. To participate in the monitoring of any miningactivity as a member of the MultipartiteMonitoring Team referred to in Section 185hereof;

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f. To participate as a member of the MineRehabilitation Fund Committee as provided forin Sections 182 to 187 hereof;

g. To be the recipient of social infrastructure andcommunity development projects for theutilization of the host and neighboringcommunities in accordance with Chapter XIVhereof;

h. To act as mediator between the IndigenousCultural Community(ies) and the Contractor(s)as may be requested;

i. To coordinate with the Department and Bureauin the implementation of the Act and theseimplementing rules and regulations in theirrespective jurisdictions. In areas covered bythe Southern Philippines Council for Peace andDevelopment (SPCPD), Autonomous Regionof Muslim Mindanao (ARMM) and futuresimilar units, the appropriate offices of said unitsshall coordinate with the Department andBureau in the implementation of the Act andthese implementing rules and regulations; and

j. To perform such other powers and functions asmay be provided for by applicable laws, rulesand regulations.

CHAPTER IIIMINERAL RESERVATIONS

AND GOVERNMENT RESERVATIONS

Section 9. Establishment, Disestablishment or Modificationof Boundary of a Mineral Reservation

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In all cases, the Director shall conduct public hearings allowingall concerned sectors and communities, interested Nongovernmentaland People's Organizations, as well as Local Government Units, to airtheir views regarding the establishment, disestablishment or modificationof any Mineral Reservation. The public shall be notified by publicationin a newspaper of general circulation in the province, as well as byposting in all affected municipalities and barangays, at least thirty (30)days before said hearings are conducted.

The recommendation of the Director shall be in writing statingtherein the grounds for the establishment, disestablishment ormodification of any specific Mineral Reservation and shall likewise bepublished after submission to the Secretary.

No recommendation of the Director shall be acted upon by theSecretary unless the preceding paragraph has been strictly compliedwith.

Upon the recommendation of the Director through theSecretary, the President may, subject to valid and existing rights, setaside and establish an area as a Mineral Reservation when the nationalinterest so requires, such as when there is a need to preserve strategicraw materials for industries critical to national development or certainminerals for scientific, cultural or ecological value. The Secretary shallcause the periodic review of existing Mineral Reservations by detailedgeological, mineral and ecological evaluation for the purpose ofdetermining whether or not their continued existence is consistent withthe national interest and upon his/her recommendation, the Presidentmay, by proclamation, alter or modify the boundaries thereof or revertthe same to the public domain without prejudice to prior existing rights.

In the proclamation of such Mineral Reservations, all valid andexisting mining rights shall be respected.

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Section 10. Government Reservations

For Government Reservations, the Department may directlyundertake exploration, development and utilization of mineral resources.In the event that the Department can not undertake such activities, thesemay be undertaken by a Qualified Person: Provided, That the right toexplore, develop and utilize the minerals found therein shall be awardedby the President under such terms and conditions as recommended bythe Director and approved by the Secretary: Provided, further, Thatsuch right shall be granted only after exploration reveals the presence ofeconomically potential deposits: Provided, finally, That the Permitteewho undertook the exploration of said Reservation shall be givenpriority.Section 11. Mining Operations within Mineral and

Government Reservations

Mining operations in Mineral Reservations shall be undertakenby the Department or through a Qualified Person under any of thefollowing modes:

a. Exploration Permit;b. Mineral Agreement;

c. Financial or Technical Assistance Agreement(FTAA);

d. Small-Scale Mining Permit; ande. Quarry Permit.

Mining operations in Government Reservations shall be first undertakenthrough an Exploration Permit, subject to limitations prescribed therein,before the same is opened for Mineral Agreement/FTAA application orother mining applications.

Application for Exploration Permit/Mineral Agreement/FTAA/Quarry Permit within Mineral and Government Reservations

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shall be governed by Chapters V, VI, VII and VIII of theseimplementing rules and regulations.

Section 12. Small-Scale Mining Operations within MineralReservations

Small-scale mining operations within Mineral Reservations shallbe governed by the pertinent rules and regulations provided for in theMineral Reservations Development Board (MRDB) AdministrativeOrder No. 3, Series of 1984, and MRDB Administrative Order No. 3-A, Series of 1987, as amended, and as may be applicable. Small-scalemining cooperatives covered by R.A. No. 7076 shall be givenpreferential right to apply for a small-scale mining contract for amaximum aggregate area of twenty-five percent (25%) of a MineralReservation subject to valid and existing mining rights.

Section 13. Payment of Royalty of Minerals/Mineral ProductsExtracted from Mineral Reservations

The Contractors/Permit Holders/Lessees shall pay to theBureau a royalty which shall not be less than five percent (5%) of themarket value of the gross output of the minerals/mineral productsextracted or produced from the Mineral Reservations exclusive of allother taxes. A ten percent (10%) share of said royalty and ten percent(10%) of other revenues such as administrative, clearance, explorationand other related fees to be derived by the Government from theexploration, development and utilization of the mineral resources withinMineral Reservations shall accrue to the Bureau as a Trust Fund andshall be deposited in a Government depository bank to be allotted forspecial projects and other administrative expenses related to theexploration, development and environmental management of minerals inGovernment Reservations.

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CHAPTER IVSCOPE OF APPLICATION

Section 14. Areas Open to Mining Applications

The following areas are open to mining applications:

a. Public or private lands not covered by valid andexisting mining rights and mining applications;

b. Lands covered by expired/abandoned/canceled mining/quarrying rights;

c. Mineral Reservations; andd. Timber or forest lands as defined in existing

laws.

Section 15. Areas Closed to Mining Applications

Pursuant to the Act and in consonance with State policies andexisting laws, areas may be either closed to mining applications orconditionally opened therefor.

a. The following areas are closed to mining applications:

1. Areas covered by valid and existingmining rights and mining applicationssubject to Subsection b(3) herein;

2. Old growth or virgin forests,proclaimed watershed forest reserves,wilderness areas, mangrove forests,mossy forests, national parks,provincial/municipal forests, tree parks,greenbelts, game refuge, birdsanctuaries and areas proclaimed as

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marine reserves/marine parks andtourist zones as defined by law andidentified initial components of theNational Integrated Protected AreasSystem (NIPAS) pursuant to R.A. No.7586 and such areas expresslyprohibited thereunder, as well as underDepartment Administrative Order No.25, Series of 1992, and other laws;

3. Areas which the Secretary may excludebased, inter alia, on properassessment of their environmentalimpacts and implications on sustainableland uses, such as built-up areas andcritical watersheds with appropriatebarangay/municipal/city/provincialSanggunian ordinance specifyingtherein the location and specificboundary of the concerned area; and

4. Areas expressly prohibited by law.

Mining applications which have beenmade over the foregoing areas shall bereviewed and, after due process, such areasmay be excluded from said applications.

b. The following areas may be opened for miningapplications the approval of which are subject to thefollowing conditions:

1. Military and other GovernmentReservations, upon prior writtenclearance by the Government agency

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having jurisdiction over suchReservations;

2. Areas near or under public or privatebuildings, cemeteries, archaeologicaland historic sites, bridges, highways,waterways, railroads, reservoirs, damsor other infrastructure projects, publicor private works, including plantationsor valuable crops, upon written consentof the concerned Government agencyor private entity subject to technicalevaluation and validation by the Bureau;

3. Areas covered by FTAA applicationswhich shall be opened for quarryresources mining applications pursuantto Section 53 hereof upon the writtenconsent of the FTAA applicants, exceptfor sand and gravel applications whichshall require no such consent;

4. Areas covered by small-scale miningunder R.A. No. 7076/P.D. No. 1899upon prior consent of the small-scaleminers, in which case a royaltypayment, upon the utilization ofminerals, shall be agreed upon by theconcerned parties and shall form aTrust Fund for the socioeconomicdevelopment of the concernedcommunity; and

5. DENR Project Areas upon priorconsent from the concerned agency.

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The Bureau shall cause the periodic review of areas closed tomining applications for the purpose of determining whether or not theircontinued closure is consistent with the national interest and render itsrecommendations, if any, to the Secretary for appropriate action.

Section 16. Ancestral Lands

In no case shall Mineral Agreements, FTAAs or mining permitsbe granted in areas subject of Certificates of AncestralDomains/Ancestral Land Claims (CADC/CALC) or in areas verified bythe Department Regional Office and/or other office or agency of theGovernment authorized by law for such purpose as actually occupiedby Indigenous Cultural Communities under a claim of time immemorialpossession except with their prior consent.

Prior consent refers to prior informed consent obtained, as faras practicable, in accordance with the customary laws of the concernedIndigenous Cultural Community. Prior informed consent should meetthe minimum requirements of public notice through various media suchas, but not limited to, newspaper, radio or television advertisements,fully disclosing the activity to be undertaken and/or sector consultationwherein the Contractor/Permit Holder/Permittee should arrange for acommunity assembly, notice of which should be announced or posted ina conspicuous place in the area for at least a month before theassembly: Provided, That the process of arriving at an informedconsent should be free from fraud, external influence and manipulations.

In the event that prior informed consent is secured inaccordance with the preceding paragraph, the concerned parties shallagree on the royalty payment for the concerned Indigenous CulturalCommunity(ies) which may not be less than one percent (1%) of thegross output. Expenses for community development may be credited toor charged against said royalty. Representatives from the

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Bureau/concerned Regional Office(s), concerned Department offices,concerned LGUs, relevant NGOs/POs and the Office of theNorthern/Southern Cultural Communities may be requested to act asmediators between the concerned Indigenous Cultural Community(ies)and the Contractor/Permit Holder/Permittee in the negotiation for theroyalty payment.

In case of disagreement concerning the royalty due theconcerned Indigenous Cultural Community(ies), the Department shallresolve the same within three (3) months. Said royalty shall form part ofa Trust Fund for the socioeconomic well-being of the IndigenousCultural Community(ies) in accordance with the management planformulated by the same in the ancestral land or domain area: Provided,That the royalty payment shall be managed and utilized by theconcerned Indigenous Cultural Community(ies).

Pending the enactment by Congress of a law on ancestral landsor domains, the implementation of this Section shall be in accordancewith Department Administrative Order No. 2, Series of 1993, andother pertinent laws.

CHAPTER VEXPLORATION PERMIT

Section 17. General Provisions

Exploration activities may be directly undertaken by the Bureauor on behalf of the Contractor subject to reimbursement of allexpenditures. In the event that the Bureau can not undertake suchexploration activities, the same may be undertaken by a QualifiedPerson in specified areas as determined by the Director.

Section 18. Term/Maximum Areas Allowed under anExploration Permit

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The term of an Exploration Permit shall be for a period of two(2) years from date of issuance thereof, renewable for like periods butnot to exceed a total term of six (6) years: Provided, That no renewalof Permit shall be allowed unless the Permittee has complied with all theterms and conditions of the Permit and has not been found guilty ofviolation of any provision of the Act and these implementing rules andregulations.

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

a. Onshore, in any one province -

1. For individuals - twenty (20) blocks orapproximately one thousand sixhundred twenty (1,620) hectares and

2. For corporations, partnerships,associations or cooperatives - twohundred (200) blocks or approximatelysixteen thousand two hundred (16,200)hectares.

b. Onshore, in the entire Philippines -

1. For individuals - forty (40) blocks orapproximately three thousand twohundred forty (3,240) hectares and

2. For corporations, partnerships,associations or cooperatives - fourhundred (400) blocks or approximatelythirty-two thousand four hundred(32,400) hectares.

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c. Offshore, in the entire Philippines, beyond fivehundred meters (500 m) from the mean low tidelevel -

1. For individuals - one hundred (100)blocks or approximately eight thousandone hundred (8,100) hectares and

2. For corporations, partnerships,associations or cooperatives - onethousand (1,000) blocks orapproximately eighty-one thousand(81,000) hectares.

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

Section 19. Application for Exploration Permit/MandatoryRequirements

Any Qualified Person may apply for an Exploration Permit(MGB Form No. 5-1) with the concerned Regional Office, except foroffshore Exploration Permit applications which shall be filed with theBureau, through payment of the required fees (Annex 5-A) andsubmission of five (5) sets of the following mandatory requirements:

a. Location map/sketch plan of the proposedpermit area showing its geographiccoordinates/meridional block(s) and boundariesin relation to major environmental features andother projects using National Mapping andResource Information Authority (NAMRIA)topographic map in a scale of 1:50,000 duly

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prepared, signed and sealed by a deputizedGeodetic Engineer;

b. Two-year Exploration Work Program (MGBForm No. 5-4) duly prepared, signed andsealed by a licensed Mining Engineer orGeologist;

c. When applicable, a satisfactory EnvironmentalManagement Record and Community RelationsRecord as determined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or the DepartmentRegional Office. The detailed guidelines for thedetermination and applicability of such recordsshall be specified by the Secretary upon therecommendation of the Director;

d. Environmental Work Program (MGB FormNo. 16-1 or MGB Form No. 16-1A) asprovided for in Section 168 hereof;

e. Proof of technical competence including, amongothers, curricula vitae and track records inexploration and environmental management ofthe technical personnel who shall undertake theactivities in accordance with the submittedExploration and Environmental WorkPrograms;

f. Proof of financial capability to undertake theExploration and Environmental Work Programssuch as the following:1. For individuals - Statement of assets

and liabilities duly sworn in accordancewith existing laws, credit lines andincome tax return for the preceding yearand

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2. For corporations, partnerships,associations or cooperatives - LatestAudited Financial Statement and whereapplicable, Annual Report for thepreceding year, credit lines, bankguarantees and/or similar negotiableinstruments.

g. Photocopy of Articles ofIncorporation/Partnership/Association, By-Laws and Certificate of Registration, dulycertified by the Securities and ExchangeCommission (SEC) or concerned authorizedGovernment agency(ies), for corporations,partnerships, associations or cooperatives;

h. Declaration of the total area covered byapproved/pending Exploration Permit(s)/application(s); and

i. Other supporting papers as theBureau/concerned Regional Office may requireor the applicant may submit.

For offshore Exploration Permit applications, the followingadditional requirements shall be submitted:

a. The name, port of registry, tonnage, type andclass of survey vessel(s)/platform(s): Provided,That if a foreign vessel is to be used, theexpected date of first entry or appearance andfinal departure of the survey vessel shall beprovided and all the necessary clearancesobtained;

b. A certification from the Coast and GeodeticSurvey Department of the NAMRIA that theproposed Exploration Work Program was dulyregistered to provide update in the publication

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of "Notice to Mariners" together with a list ofsafety measures to be regularly undertaken toensure the safety of navigation at sea andprevent accident;

c. An agreement to:

1. Properly identify all installations, vesselsand other crafts involved in explorationrecognizable to all vessels withinreasonable distance;

2. Notify the Bureau thirty (30) calendardays prior to the intention to remove allscientific installations or equipment andapparatus; and

3. Allow the Bureau's authorizedpersonnel, Philippine Coast Guard andother authorized persons duringreasonable hours to board the vessel(s)while within the Exclusive EconomicZone.

d. Other supporting papers as the Bureau mayrequire or the applicant may submit.

If the applicant conducts or has conducted exploration in aforeign country(ies), the Department shall verify the relevantrequirements through the Philippine Embassy(ies) or Consulate(s) basedin such country(ies).

Where the area applied for falls within the administration of two(2) or more Regional Offices, the application shall be filed with theRegional Office where the comparatively larger portion of the area is

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located, copy furnished the other concerned Regional Office(s) by theapplicant within three (3) working days from the date of filing.

The Regional Office shall regularly provide the Bureau with alist, consolidated map and status report of the Exploration Permitapplications filed in its jurisdiction.

Section 20. Area Status/Clearance

Within fifteen (15) working days from receipt of the ExplorationPermit application, the Bureau for areas within Mineral Reservations, orthe concerned Regional Office(s), for areas outside MineralReservations, shall check in the control maps if the area is free/open formining applications. The Regional Office shall also transmit a copy ofthe location map/sketch plan of the applied area to the pertinentDepartment sector(s) affected by the Exploration Permit application forarea status, copy furnished the concerned municipality(ies)/city(ies) andother relevant offices or agencies of the Government for theirinformation. Upon notification of the applicant by the Regional Officeas to the transmittal of said document to the concerned Departmentsector(s) and/or Government agency(ies), it shall be the responsibility ofthe same applicant to secure the necessary areastatus/consent/clearance from said Department sector(s) and/orGovernment agency(ies). The concerned Department sector(s) mustsubmit the area status/consent/clearance on the proposed permit areawithin thirty (30) working days from receipt of the notice: Provided,That the concerned Department sector(s) can not unreasonably denyarea clearance/consent without legal and/or technical basis: Provided,further, That if the area applied for falls within the administration of two(2) or more Regional Offices, the concerned Regional Office(s) whichhas/have jurisdiction over the lesser area(s) of the application shallfollow the same procedure.

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In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/ clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

If the proposed permit area is open for mining applications, theBureau/concerned Regional Office(s) shall give written notice to theapplicant to pay the corresponding Bureau/Regional Office(s) clearancefee (Annex 5-A): Provided, That if a portion of the area applied for isnot open for mining applications, the concerned Regional Office shall,within fifteen (15) working days from receipt of said written notice,exclude the same from the coverage of Exploration Permit application:Provided, further, That in cases of overlapping ofclaims/conflicts/complaints from landowners, NGOs, LGUs and otherconcerned stakeholders, the Regional Director shall exert all efforts toresolve the same.

Section 21. Publication/Posting/Radio Announcement of anExploration Permit Application

Within fifteen (15) working days from receipt of the necessaryarea clearances, the Bureau/concerned Regional Office(s) shall issue tothe applicant the Notice of Application for Exploration Permit forpublication, posting and radio announcement which shall be done withinfifteen (15) working days from receipt of the Notice. The Notice mustcontain, among others, the name and complete address of the applicant,duration of the permit applied for, extent of exploration activities to beundertaken, area location, geographical coordinates/meridional block(s)of the proposed permit area and location map/sketch plan with indexmap relative to major environmental features and projects and to thenearest municipalities.

The Bureau/concerned Regional Office(s) shall cause thepublication of the Notice once a week for two (2) consecutive weeks intwo (2) newspapers: one of general circulation published in Metro

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Manila and another published in the municipality or province where theproposed permit area is located, if there be such newspapers;otherwise, in the newspaper published in the nearest municipality orprovince.

The Bureau/concerned Regional Office shall also cause theposting for two (2) consecutive weeks of the Notice on the bulletinboards of the Bureau, the concerned Regional Office(s), ProvincialEnvironmental and Natural Resources Office(s) (PENRO(s)),Community Environmental and Natural Resources Office(s)(CENRO(s)) and in the concerned province(s) and municipality(ies),copy furnished the barangay(s) where the proposed permit area islocated. Where necessary, the Notice shall be in a language generallyunderstood in the concerned locality where it is posted.

The radio announcements shall be made daily for two (2)consecutive weeks in a local radio program and shall consist of thename and complete address of the applicant, area location, duration ofthe permit applied for and instructions that information regarding suchapplication may be obtained at the Bureau/concerned RegionalOffice(s). The publication and radio announcements shall be at theexpense of the applicant.

Within thirty (30) calendar days from the last date ofpublication/posting/radio announcements, the authorized officer(s) of theconcerned office(s) shall issue a certification(s) that thepublication/posting/radio announcement have been complied with. Anyadverse claim, protest or opposition shall be filed directly, within thirty(30) calendar days from the last date of publication/posting/radioannouncement, with the concerned Regional Office or through anyconcerned PENRO or CENRO for filing in the concerned RegionalOffice for purposes of its resolution by the Panel of Arbitrators pursuantto the provisions of the Act and these implementing rules andregulations. Upon final resolution of any adverse claim, protest or

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opposition, the Panel of Arbitrators shall issue a Certification to thateffect within five (5) working days from the date of finality of resolutionthereof. Where no adverse claim, protest or opposition is filed after thelapse of the period for filing the adverse claim, protest or opposition, thePanel of Arbitrators shall likewise issue a Certification to that effectwithin five (5) working days therefrom.

However, previously published valid and existing mining claimsare exempted from the publication/posting/radio announcement requiredunder this Section.

No Exploration Permit shall be approved unless therequirements under this Section are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved.

Section 22. Terms and Conditions of an Exploration PermitAn Exploration Permit shall contain the following terms and

conditions:a. The right to explore shall be subject to valid,

prior and existing rights of any party(ies) withinthe subject area;

b. The Permit shall be for the exclusive use andbenefit of the Permittee or its duly authorizedrepresentative and, shall under nocircumstances, be used by the Permittee forpurposes other than exploration;

c. The term of the Permit shall be for a period oftwo (2) years from date of issuance thereof,renewable for like periods but not to exceed atotal term of six (6) years: Provided, That norenewal of Permit shall be allowed unless thePermittee has complied with the terms andconditions of the Permit and shall not have been

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found guilty of violation of any provision of theAct and these implementing rules andregulations;

d. The Permittee shall submit to theBureau/concerned Regional Office within thirty(30) calendar days after the end of eachsemester a report under oath of the ExplorationWork Program implementation andexpenditures showing discrepancies/deviationsincluding the results of the survey, laboratoryreports, geological reports/maps subject tosemiannual inspection and verification by theBureau/concerned Regional Office at theexpense of the Permittee: Provided, That anyexpenditure in excess of the yearly budget ofthe approved Exploration Work Program maybe carried forward and credited to thesucceeding years covering the duration of thePermit;

e. The Permittee shall submit to theBureau/concerned Regional Office within thirty(30) calendar days from the end of six (6)months after the approval of the EnvironmentalWork Program (EWP) and every six (6)months thereafter a status report on itscompliance with the said EWP;

f. The Permittee shall annually relinquish at least 20%of the permit area during the first two (2) years ofexploration and at least 10% of the remainingpermit area annually during the extendedexploration period. However, if the permit area isless than five thousand (5,000) hectares, thePermittee need not relinquish any part thereof. A

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separate report of relinquishment shall besubmitted to the Bureau/concerned RegionalOffice with a detailed geologic report of therelinquished area accompanied by maps at a scaleof 1:50,000 and results of analyses andcorresponding expenditures, among others. Theminimum exploration expenditures for theremaining area after relinquishment shall be basedon the approved Exploration Work Program;

g. The Secretary or his/her duly authorizedrepresentative shall annually review theperformance of the Permittee;

h. The Permittee shall submit to theBureau/concerned Regional Office a final reportupon the expiration or relinquishment of the Permitor its conversion into Mineral Agreement or FTAAin a form and substance comparable to publishedreports of respected international organizations andshall incorporate all the findings in the permit area,including locations of samples, assays, chemicalanalyses and assessment of the mineral potential.Such report shall include complete detailedexpenditures incurred during the exploration;

i. In case of diamond drilling, the Permittee shall,upon request of the Director/concerned RegionalDirector, submit to the Bureau/concerned RegionalOffice a quarter of the core samples which shall bedeposited in the Bureau/concerned Regional OfficeCore Library for reference and safekeeping;

j. Offshore exploration activities shall be carried outin accordance with the United Nations Conventionon the Law of the Sea (UNCLOS) and in a

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manner that will not adversely affect the safety ofnavigation at sea and will ensure accommodationwith other marine activities such as fishing,aquaculture, transportation, etc.;

k. Onshore exploration activities shall be carried outin a manner that will, at all times, safeguard theenvironment;

l. If the Permittee applies for a MineralAgreement or FTAA over the permit area, theexploration period covered by the ExplorationPermit shall be considered as the explorationperiod of the Mineral Agreement or FTAA;

m. The Permittee shall comply with pertinentprovisions of the Act and these implementingrules and regulations; and

n. Other terms and conditions which theBureau/concerned Regional Office may deemappropriate.

Section 23. Registration of Exploration Permit

Upon evaluation that all the terms and conditions are in orderand that the subject area has been cleared from any conflict, theDirector/concerned Regional Director shall approve and issue theExploration Permit within thirty (30) calendar days from such evaluationand shall cause the registration of the same to the Bureau/concernedRegional Office after payment of the required fees (Annex 5-A). Incase of renewal, the Secretary shall issue the Exploration Permit (MGBForm No. 5-2) within thirty (30) calendar days from therecommendation of the Director.

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Section 24. Rights and Obligations of the Permittee

The Permittee, its heirs or successors-in-interest shall have theright to enter, occupy and explore the permit area, all other rightsprovided for in the Act and these implementing rules and regulations;and the obligation to fully comply with the terms and conditions of theExploration Permit.

Section 25. Transfer or Assignment of Exploration Permit

An Exploration Permit may be transferred or assigned toanother Qualified Person(s) subject to the approval of the Secretaryupon the recommendation of the Director.

Section 26. Relinquishment of Areas Covered by ExplorationPermit

The Permittee may, at any time, relinquish the whole or anyportion of the total permit area by filing a notice of relinquishment withthe Bureau/concerned Regional Office.

Section 27. Renewal of Exploration Permit

Within sixty (60) calendar days before the expiration of anExploration Permit, the Permittee may submit to the Bureau, copyfurnished the concerned Regional Office, an application to renew theExploration Permit accompanied by five (5) sets of the followingmandatory requirements:

a. Justification of renewal;b. Comprehensive and validated technical report

on the outcome of the two-year explorationworks, including their environmental effects duly

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prepared, signed and sealed by a licensedMining Engineer or Geologist;

c. Audited report of expenditures incurred duringthe exploration period;

d. Two-year Exploration Work Program (MGBForm No. 5-4) duly prepared, signed andsealed by a licensed Mining Engineer orGeologist;

e. Environmental Work Program (MGB FormNo. 16-1 or MGB Form No. 16-1A) asprovided for in Section 168 hereof; and

f. Other supporting papers as theDepartment/Bureau may require or theapplicant may submit.

The Secretary may grant the renewal after field verification bythe Bureau/concerned Regional Office of the foregoing requirements,which field verification shall be undertaken at the expense of thePermittee.

Section 28. Cancellation of an Exploration Permit

The Director/concerned Regional Director may cancel theExploration Permit for failure of the Permittee to comply with any of therequirements and for violation(s) of the terms and conditions underwhich the Permit is issued. For renewed Exploration Permits, theSecretary upon the recommendation of the Director shall cause thecancellation of the same.

Upon cancellation of the Permit covering areas withinGovernment Reservations, the said areas shall automatically be revertedback to its original status.

Section 29. Effect of Relinquishment or Cancellation ofExploration Permit

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The foregoing provisions notwithstanding, relinquishment orcancellation shall not release the Permittee from any and all obligations itmay have, particularly with regard to ecological management, at the timeof relinquishment or cancellation.

Section 30. Declaration of Mining Project Feasibility

If results of exploration reveal the presence of mineral depositseconomically and technically feasible for mining operations, thePermittee may, within the term of the Exploration Permit, file adeclaration of mining project feasibility. The approval of the declarationof mining project feasibility by the Director/concerned Regional Directorshall grant the Permittee the exclusive right to a Mineral Agreement orFTAA over the permit area: Provided, That failure of the Permittee toapply for Mineral Agreement or FTAA within a period of one (1) yearfrom the date of approval of the declaration of mining project feasibilityshall mean automatic cancellation of the declaration of mining projectfeasibility.

The application for Mineral Agreement or FTAA by aPermittee shall be accompanied by five (5) sets of the followingmandatory requirements:

a. Mining Project Feasibility Study (MGB FormNo. 5-3);

b. Complete Geologic Report of the area;c. Approved Survey Plan;d. Three-year Development/Utilization Work

Program (MGB Form No. 6-2), as deemedapplicable, duly prepared, signed and sealed bya licensed Mining Engineer, Geologist orMetallurgical Engineer;

e. Environmental Work Program (MGB FormNo. 16-1 or MGB Form No. 16-1A) during

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the exploration period as provided for inSection 168 hereof or EnvironmentalCompliance Certificate prior to development,construction and/or utilization andEnvironmental Protection and EnhancementProgram (MGB Form No. 16-2) as providedfor in Section 169 hereof;

f. Proof of technical competence including, amongothers, curricula vitae and track records inmining operations and environmentalmanagement of the technical personnel whoshall undertake the activities in accordance withthe submittedExploration/Development/Utilization WorkProgram and Environmental Work/Environmental Protection and EnhancementProgram, as deemed applicable;

g. Proof of financial capability to undertake theactivities pursuant toExploration/Development/Utilization WorkProgram and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemed applicable,such as statement of assets and liabilities dulysworn in accordance with existing laws, creditlines and income tax return for the precedingyear;

h. Proof of award of the area by the President forareas within Government Reservations; and

i. Other supporting papers as theDepartment/Bureau may require or theapplicant may submit.

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The processing of the application for a Mineral Agreement orFTAA shall be in accordance with Chapters VI and VII, respectively,of these implementing rules and regulations.

CHAPTER VIMINERAL AGREEMENTS

Section 31. Kinds of Mineral Agreements and Nature Thereof

There are three (3) kinds of Mineral Agreements, namely:

a. Mineral Production Sharing Agreement(MPSA) - an agreement wherein theGovernment grants to the Contractor theexclusive right to conduct mining operationswithin, but not title over, the contract area andshares in the production whether in kind or invalue as owner of the minerals therein. TheContractor shall provide the necessaryfinancing, technology, management andpersonnel;

b. Co-Production Agreement (CA) - anagreement between the Government and theContractor wherein the Government shallprovide inputs to the mining operations otherthan the mineral resources; and

c. Joint Venture Agreement (JVA) - an agreementwhere a joint venture company is organized bythe Government and the Contractor with bothparties having equity shares. Aside fromearnings in equity, the Government shall beentitled to a share in the gross output.

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Section 32. Eligibility of Applicant for Mineral Agreement

The following Qualified Person may apply for a MineralAgreement for the exploration, development and utilization of mineralresources:

a. In case of an individual - must be a Filipinocitizen of legal age and with capacity tocontract; or

b. In case of a corporation, partnership,association or cooperative - must be organizedor authorized for the purpose of engaging inmining, duly registered in accordance with law,at least sixty percent (60%) of the capital ofwhich is owned by Filipino citizens.

Section 33. Maximum Areas Allowed under a MineralAgreement

The maximum area that a Qualified Person may apply for orhold at any one time under a Mineral Agreement shall be as follows:

a. Onshore, in any one province -

1. For individuals - ten (10) blocks orapproximately eight hundred ten (810)hectares and

2. For corporations, partnerships,associations or cooperatives -onehundred (100) blocks or approximatelyeight thousand one hundred (8,100)hectares.

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b. Onshore, in the entire Philippines -

1. For individuals - twenty (20) blocks orapproximately one thousand sixhundred twenty (1,620) hectares and

2. For corporations, partnerships,associations or cooperatives - twohundred (200) blocks or approximatelysixteen thousand two hundred (16,200)hectares.

c. Offshore, in the entire Philippines, beyond fivehundred meters (500 m) from the mean low tidelevel -

1. For individuals - fifty (50) blocks orapproximately four thousand fifty(4,050) hectares,

2. For corporations, partnerships,associations or cooperatives - fivehundred (500) blocks or approximatelyforty thousand five hundred (40,500)hectares and

3. For the Exclusive Economic Zone - alarger area to be determined by theSecretary upon the recommendation ofthe Director.

The above-mentioned maximum areas that a Contractor mayapply for or hold under a Mineral Agreement shall not includemining/quarry areas under operating agreements between theContractor and a claimowner/Lessee/Permittee/licensee entered intounder P.D. No. 463.

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Section 34. Term of a Mineral Agreement

A Mineral Agreement shall have a term not exceeding twenty-five (25) years from the date of execution thereof, and renewable foranother term not exceeding twenty-five (25) years under the same termsand conditions thereof, without prejudice to changes mutually agreedupon by the Government and the Contractor.

After the renewal period, the operation of the mine may beundertaken by the Government or through a Contractor. The contractfor the operation of a mine shall be awarded to the highest bidder in apublic bidding after due publication of the notice thereof: Provided,That the original Contractor shall have the right to equal the highest bidupon reimbursement of all reasonable expenses of the highest bidder.

Section 35. Mandatory Requirements for Mineral AgreementApplication

The applicant shall submit at least five (5) sets of the followingmandatory requirements depending on the type of agreement appliedfor:

a. For individuals -

1. Location map/sketch plan of theproposed contract area showing itsgeographic coordinates/meridionalblock(s) and boundaries in relation tomajor environmental features and otherprojects using NAMRIA topographicmap in a scale of 1:50,000 duly

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prepared, signed and sealed by adeputized Geodetic Engineer;

2. Two-year Exploration Work Program(MGB Form No. 5-4) or three-yearDevelopment/Utilization Work Program(MGB Form No. 6-2), as deemedapplicable, duly prepared, signed andsealed by a licensed Mining Engineer,Geologist or Metallurgical Engineer;

3. When applicable, a satisfactoryEnvironmental Management Recordand Community Relations Record asdetermined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or theDepartment Regional Office. Thedetailed guidelines for the determinationand applicability of such records shallbe specified by the Secretary upon therecommendation of the Director;

4. Environmental Work Program (MGBForm No. 16-1 or MGB Form No.16-1A) during the exploration period asprovided for in Section 168 hereof orEnvironmental Compliance Certificateprior to development, constructionand/or utilization and EnvironmentalProtection and Enhancement Program(MGB Form No. 16-2) as provided forin Section 169 hereof;

5. Proof of technical competenceincluding, among others, curricula vitae

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and track records in mining operationsand environmental management of thetechnical personnel who shall undertakethe activities in accordance with thesubmitted Exploration/ Development/Utilization Work Program andEnvironmental Work/EnvironmentalProtection and Enhancement Program,as deemed applicable;

6. Proof of financial capability toundertake the activities pursuant toExploration/Development/UtilizationWork Program and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemedapplicable, such as statement of assetsand liabilities duly sworn in accordancewith existing laws, credit lines andincome tax return for the precedingyear;

7. Declaration of the total area covered byapproved/pending MineralAgreement(s)/ application(s); and

8. Other supporting papers as theDepartment/Bureau/ concernedRegional Office may require or theapplicant may submit.

b. For corporations, partnerships, associations orcooperatives -1. Duly certified Certificate of Registration

issued by the Securities and Exchange

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Commission or concerned authorizedGovernment agency;

2. Duly certified Articles ofIncorporation/Partnership/Associationand By-Laws;

3. Location map/sketch plan of theproposed contract area showing itsgeographic coordinates/meridionalblock(s) and boundaries in relation tomajor environmental features and otherprojects using NAMRIA topographicmap in a scale of 1:50,000 dulyprepared, signed and sealed by adeputized Geodetic Engineer;

4. Two-year Exploration Work Program(MGB Form No. 5-4) or three-yearDevelopment/Utilization Work Program(MGB Form No. 6-2), as deemedapplicable, duly prepared, signed andsealed by a licensed Mining Engineer,Geologist or Metallurgical Engineer;

5. When applicable, a satisfactoryEnvironmental Management Recordand Community Relations Record asdetermined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or theDepartment Regional Office. Thedetailed guidelines for the determinationand applicability of such records shallbe specified by the Secretary upon therecommendation of the Director;

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6. Environmental Work Program (MGBForm No. 16-1 or MGB Form No.16-1A) during the exploration period asprovided for in Section 168 hereof orEnvironmental Compliance Certificateprior to development, constructionand/or utilization and EnvironmentalProtection and Enhancement Program(MGB Form No. 16-2) as provided forin Section 169 hereof;

7. Proof of technical competenceincluding, among others, curricula vitaeand track records in mining operationsand environmental management of thetechnical personnel who shall undertakethe activities in accordance with thesubmittedExploration/Development/UtilizationWork Program and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemedapplicable;

8. Proof of financial capability toundertake the activities pursuant toExploration/Development/UtilizationWork Program and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemedapplicable, such as latest AuditedFinancial Statement and whereapplicable, Annual Report for thepreceding year, credit lines, bank

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guarantees and/or similar negotiableinstruments;

9. Declaration of the total area covered byapproved/pending MineralAgreement(s)/application(s); and

10. Other supporting papers as theDepartment/ Bureau/ concernedRegional Office may require or theapplicant may submit.If the applicant conducts or has

conducted mining operations in a foreigncountry(ies), the Department shall verify therelevant requirements through the PhilippineEmbassy(ies) or Consulate(s) based in suchcountry(ies).

c. For holders of valid and existing mining leasecontracts, operating agreements, QuarryPermits/licenses or unperfected mining/ uarryclaims, the following shall be submitted inaddition to the aforesaid requirements,whenever applicable, namely:1. Certification from the concerned

Regional Office that the mining/quarryclaims are valid and subsisting;

2. Appropriate environmental report onthe rehabilitation of mined-out and/ormine waste/tailings-covered areas andanti-pollution measures undertakenduring the mining operations;

3. Environmental Compliance Certificatefor any new phase outside of theoriginally approved operation under themining project;

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4. Mining Project Feasibility Study (MGBForm No. 5-3);

5. Three-yearDevelopment/Construction/UtilizationWork Program (MGB Form No. 6-2),as deemed applicable, duly prepared,signed and sealed by a licensed MiningEngineer, Geologist or MetallurgicalEngineer;

6. Approved Survey Plan of the miningarea; and

7. Other supporting papers as theDepartment/ Bureau/ concernedRegional Office may require or theapplicant may submit.

Section 36. Filing of Mineral Agreement ApplicationsThe Mineral Agreement application (MGB Form No. 6-1) shall

be filed by the applicant either personally or through its duly authorizedrepresentative with the Bureau/concerned Regional Office: Provided,That any application that transcends into two (2) or more regions shallbe filed with the Regional Office which has the largest area covered bythe application, copy furnished the other concerned Regional Office(s)by the applicant: Provided, further, That a Mineral Agreementapplication shall be accepted only upon payment of the required fees(Annex 5-A) to the Bureau/concerned Regional Office: Provided,finally, That any application with incomplete mandatory requirementsshall not be accepted.

The Regional Office shall regularly provide the Bureau with alist, consolidated map and status report of Mineral Agreementapplications filed in its jurisdiction.

Section 37. Area Status/Clearance

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Within fifteen (15) working days from receipt of the MineralAgreement application, the Bureau/concerned Regional Office(s) shallcheck in the control maps if the area is free/open for miningapplications. The Regional Office shall also transmit a copy of thelocation map/sketch plan of the applied area to the pertinentDepartment sector(s) affected by the Mineral Agreement application forarea status, copy furnished the concerned municipality(ies)/city(ies) andother relevant offices or agencies of the Government for theirinformation. Upon notification of the applicant by the Regional Officeas to the transmittal of said document to the concerned Departmentsector(s) and/or Government agency(ies), it shall be the responsibility ofthe same applicant to secure the necessary areastatus/consent/clearance from said Department sector(s) and/orGovernment agency(ies). The concerned Department sector(s) mustsubmit the area status/consent/clearance on the proposed contract areawithin thirty (30) working days from receipt of the notice: Provided,That the concerned Department sector(s) can not unreasonably denyarea clearance/consent without legal and/or technical basis: Provided,further, That if the area applied for falls within the administration of two(2) or more Regional Offices, the concerned Regional Office(s) whichhas/have jurisdiction over the lesser area(s) of the application shallfollow the same procedure.

In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

If the proposed contract area is open for mining applications,the Bureau/concerned Regional Office(s) shall give written notice to theapplicant to pay the corresponding Bureau/Regional Office(s) clearancefee (Annex 5-A): Provided, That if a portion of the area applied for isnot open for mining applications, the concerned Regional Office shall,

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within fifteen (15) working days from receipt of said written notice,exclude the same from the coverage of Mineral Agreement application:Provided, further, That in cases of overlapping ofclaims/conflicts/complaints from landowners, NGOs, LGUs and otherconcerned stakeholders, the Regional Director shall exert all efforts toresolve the same.

Section 38. Publication/Posting/Radio Announcement of aMineral Agreement Application

Within fifteen (15) working days from receipt of the necessaryarea clearances, the Bureau/concerned Regional Office(s) shall issue tothe applicant the Notice of Application for Mineral Agreement forpublication, posting and radio announcement which shall be done withinfifteen (15) working days from receipt of the Notice. The Notice mustcontain, among others, the name and complete address of the applicant,duration of the agreement applied for, extent of operation to beundertaken, area location, geographical coordinates/meridional block(s)of the proposed contract area and location map/sketch plan with indexmap relative to major environmental features and projects and to thenearest municipalities.

The Bureau/concerned Regional Office(s) shall cause thepublication of the Notice once a week for two (2) consecutive weeks intwo (2) newspapers: one of general circulation published in MetroManila and another published in the municipality or province where theproposed contract area is located, if there be such newspapers;otherwise, in the newspaper published in the nearest municipality orprovince.

The Bureau/concerned Regional Office shall also cause theposting for two (2) consecutive weeks of the Notice on the bulletinboards of the Bureau, the concerned Regional Office(s), PENRO(s),CENRO(s) and in the concerned province(s) and municipality(ies),copy furnished the barangay(s) where the proposed contract area is

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located. Where necessary, the Notice shall be in a language generallyunderstood in the concerned locality where it is posted.

The radio announcements shall be made daily for two (2)consecutive weeks in a local radio program and shall consist of thename and complete address of the applicant, area location, duration ofthe agreement applied for and instructions that information regardingsuch application may be obtained at the Bureau/concerned RegionalOffice(s). The publication and radio announcements shall be at theexpense of the applicant.

Within thirty (30) calendar days from the last date ofpublication/posting/radio announcements, the authorized officer(s) of theconcerned office(s) shall issue a certification(s) that thepublication/posting/radio announcement have been complied with. Anyadverse claim, protest or opposition shall be filed directly, within thirty(30) calendar days from the last date of publication/posting/radioannouncement, with the concerned Regional Office or through anyconcerned PENRO or CENRO for filing in the concerned RegionalOffice for purposes of its resolution by the Panel of Arbitrators pursuantto the provisions of the Act and these implementing rules andregulations. Upon final resolution of any adverse claim, protest oropposition, the Panel of Arbitrators shall issue a Certification to thateffect within five (5) working days from the date of finality of resolutionthereof. Where no adverse claim, protest or opposition is filed after thelapse of the period for filing the adverse claim, protest or opposition, thePanel of Arbitrators shall likewise issue a Certification to that effectwithin five (5) working days therefrom.

However, previously published valid and existing mining claimsare exempted from the publication/posting/radio announcement requiredunder this Section.

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No Mineral Agreement shall be approved unless therequirements under this Section are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved by the Panel ofArbitrators.

Section 39. Terms and Conditions of a Mineral AgreementThe following terms and conditions shall be incorporated in the

Mineral Agreement, namely:a. A stipulation that the Contractor shall not, by

virtue of the Mineral Agreement, acquire anytitle over the contract/mining area withoutprejudice to the acquisition by the Contractor ofthe land/surface rights through any mode ofacquisition provided for by law;

b. Representations and warranties that theContractor has, or has access to, all thefinancing and technical capability andtechnology required to promptly and effectivelycarry out the objectives of the Agreement withthe understanding to timely utilize theseresources under its supervision pursuant to theperiodic work programs and related budgets,and when proper, providing an explorationperiod up to two (2) years from date ofissuance thereof, renewable for like periods butnot to exceed a total term of six (6) years,subject to annual review by the Director inaccordance with these implementing rules andregulations;

c. Representations and warranties that theapplicant has all the qualifications and none ofthe disqualifications for entering into theAgreement;

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d. A stipulation that the Contractor may relinquishtotally or partially the original contract areaduring the exploration period. After theexploration period and prior to or uponapproval of declaration of mining projectfeasibility, the Contractor shall finally relinquishto the Government any portion of the contractarea which shall not be necessary for miningoperations and not covered by any declarationof mining feasibility with the correspondingsubmission to the Bureau/concerned RegionalOffice of geologic report and pertinent maps inthe scale of 1:50,000. The minimumexploration expenditures for the remaining areaafter relinquishment shall be based on theapproved Exploration Work Program;

e. A stipulation that each mining area after finalrelinquishment shall not be more than fivethousand (5,000) hectares for metallic mineralsand two thousand (2,000) hectares fornonmetallic minerals: Provided, That theDirector, with the approval of the Secretary,may allow a Contractor to hold a larger miningarea depending upon the nature of the depositsubject to technical verification and evaluationby the Bureau as to the technical/financialcapability of the Contractor;

f. A stipulation that the mining operations shall beconducted in accordance with the provisions ofthe Act and these implementing rules andregulations;

g. A stipulation that the Contractor shall givepreference to goods and services produced and

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offered in the Philippines of comparative qualityand cost. In particular, the Contractor shallgive preference to qualified Filipino constructionenterprises, construction materials and skillsavailable in the Philippines, Filipino sub-contractors for road construction andtransportation, and Philippine householdequipment, furniture and food;

h. A stipulation that the Contractor is obliged togive preference to Filipinos in all types of miningemployment for which they are qualified andthat the technology shall be transferred to thesame;

i. A stipulation that the Contractor shall notdiscriminate on the basis of gender and that theContractor shall respect the right of womenworkers to participate in policy and decision-making processes affecting their rights andbenefits;

j. A stipulation requiring the Contractor to effectivelyuse the best available appropriate anti-pollutiontechnology and facilities to protect the environmentand to restore or rehabilitate mined-out areas andother areas affected by mine waste/mill tailings andother forms of pollution or destruction incompliance with the requirements of the ECC andP.D. No. 984. This should be undertaken incoordination with the EMB/Department RegionalOffice;

k. A stipulation that the Contractor shall furnish theGovernment an annual report of its miningoperations and records of geologic, accountingand other relevant data, and that book of accounts

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and records shall be open for inspection by theGovernment;

l. A stipulation requiring the Contractor to dispose ofthe minerals and by-products produced at thehighest market price and to negotiate for moreadvantageous terms and conditions subject to theright to enter into long-term sales or marketingcontracts or foreign exchange and commodityhedging contracts which the Governmentacknowledges to be acceptable notwithstandingthat the sale price of the minerals may from time totime be lower, or the terms and conditions of salesare less favorable, than that available elsewhere:Provided, That the Bureau is furnished a copy ofthe said Sales Agreement subject to confidentialitybetween the Bureau and the Contractor;

m. A stipulation providing for consultation andarbitration with respect to the interpretation andimplementation of the terms and conditions ofthe Agreement;

n. A stipulation that the Contractor shall pay fees,taxes, royalties and other obligations inaccordance with existing laws, rules andregulations;

o. A stipulation that alien employment shall belimited to technologies requiring highlyspecialized training and experience subject tothe required approval under existing laws, rulesand regulations;

p. A stipulation that in every case where foreigntechnologies are utilized and where alienexecutives are employed, an effective programof training understudies shall be undertaken;

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q. A stipulation that the Contractor shall conformwith laws, rules and regulations regarding,among others, labor, safety and healthstandards;

r. A stipulation that the Contractor shall confine itsmining operations to its contract/mining areaand that it shall not interfere with the rights ofotherContractors/Lessees/operators/Permittees/Permit Holders;

s. A stipulation that the Contractor shall recognizeand respect the rights, customs and traditions oflocal communities, particularly IndigenousCultural Communities;

t. A stipulation that the Contractor shall contributeto the development of the host and neighboringcommunities of the mining area, localgeoscience and mining technology inaccordance with Chapter XIV hereof;

u. A stipulation that the Contractor shall complywith its obligations under its EnvironmentalProtection and Enhancement Program (EPEP)and its Annual EPEP, including the allocation ofthe prescribed annual environmental expensepursuant to Section 171 hereof;

v. A stipulation that the Contractor shall utilize thebest available appropriate and efficient miningand processing technologies;

w. A stipulation that the Contractor shall undertakeexploration work on the area as specified in itsAgreement based on an approved WorkProgram: Provided, That a negative variance ofat least twenty percent (20%) in the Work

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Program and corresponding expenditures shallbe subject to approval of theDirector/concerned Regional Director;

x. A stipulation that the Contractor shall submitannually starting from the date of approval ofthe Agreement, progress reports of theexploration activities in the prescribed form.This shall be accompanied by raw geologic,geophysical and geochemical data plotted in a1:50,000 scale map, at a minimum. A quarterlyreport containing activities and accomplishmentsfor each quarter shall also be submitted. At theend of the exploration term, the Contractor shallsubmit the final report with the detailed list ofactivities with the corresponding expenditures.The final report shall be accompanied by a1:50,000 geologic map of the contract areaacceptable by international standards. Allreports referred to herein shall be submitted tothe Bureau/concerned Regional Office;

y. A stipulation that the Mineral Agreement shallbe canceled, revoked or terminated for failureof the Contractor to comply with the terms andconditions thereof or for other grounds asprovided for in Section 230 hereof;

z. A stipulation that withdrawal by the Contractorfrom the Mineral Agreement shall not release it fromany and all financial, environmental, legal and fiscalobligations under the Agreement;

aa. A stipulation that the Contractor shall complywith all other applicable provisions of the Act

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and these implementing rules and regulations;and

ab. Such other terms and conditions notinconsistent with the Constitution, the Act andthese implementing rules and regulations, as wellas those which the Secretary may deem to befor the national interest and public welfare.

The Department shall formulate and promulgate such otherrules, regulations and guidelines necessary to ensure compliance withthe terms and conditions herein stated.

Section 40. Transfer or Assignment of Mineral AgreementApplication

Transfer or assignment of Mineral Agreement applications shallbe allowed subject to the approval of the Director/concerned RegionalDirector taking into account the national interest and public welfare:Provided, That such transfer or assignment shall be subject to eligibilityrequirements and shall not be allowed in cases involving speculation.

Section 41. Evaluation of Mineral Agreement Application

Within fifteen (15) working days from receipt of theCertification issued by the Panel of Arbitrators as provided for inSection 38 hereof, the concerned Regional Director shall initiallyevaluate the Mineral Agreement applications in areas outside MineralReservations. He/She shall thereafter endorse his/her findings to theBureau for further evaluation by the Director within fifteen (15) workingdays from receipt of forwarded documents. Thereafter, the Directorshall endorse the same to the Secretary for consideration/approvalwithin fifteen (15) working days from receipt of such endorsement.

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In case of Mineral Agreement applications in areas withinMineral Reservations, within fifteen (15) working days from receipt ofthe Certification issued by the Panel of Arbitrators as provided for inSection 38 hereof, the same shall be evaluated and endorsed by theDirector to the Secretary for consideration/approval within fifteen (15)working days from receipt of such endorsement.

Section 42. Temporary Exploration Permit

While awaiting for the approval of the Mineral Agreementapplication by the Secretary, the Director may, upon the request of theapplicant, issue a one-time non-renewable Temporary ExplorationPermit (TEP) with a term not exceeding one (1) year to undertakeexploration subject to the applicable provisions of Chapter V of theseimplementing rules and regulations: Provided, That the term of the TEPshall be deducted from the exploration period of the MineralAgreement: Provided, further, That in the event that the MineralAgreement application is disapproved by the Secretary, the TEP isdeemed automatically canceled.

Section 43. Registration of Mineral Agreement

Upon approval of the Mineral Agreement by the Secretary, thesame shall be forwarded to the Bureau for numbering. The Directorshall notify the Contractor to cause the registration of its MineralAgreement with the Bureau for areas inside Mineral Reservations orwith the concerned Regional Office for areas outside MineralReservations within fifteen (15) working days from receipt of the writtennotice. Registration is effected only upon payment of the required fees(Annex 5-A). The Bureau/concerned Regional Office shall officiallyrelease the Mineral Agreement to the Contractor after registration of thesame.

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Failure of the Contractor to cause the registration of its MineralAgreement within the prescribed period shall be a sufficient ground forcancellation of the same.

Section 44. Rights and Obligations of the Contractor

The Contractor, its heirs or successors-in-interest shall have theright to exclusively conduct mining operations within the contract areawith full rights of ingress and egress, the right to occupy the same, allother rights provided for in the Act and these implementing rules andregulations; and the obligation to fully comply with the terms andconditions of the Mineral Agreement.

Section 45. Conversion of a Mineral Agreement into AnyOther Mode of Mineral Agreement or FTAA

A Contractor may at its option convert totally or partially itsMineral Agreement into another mode of Mineral Agreement or FTAAby filing a Letter of Intent with the Bureau, copy furnished theconcerned Regional Office. All revisions to the Mineral Agreementrequired by its conversion into any other mode of Mineral Agreement orFTAA shall be submitted to the Director within sixty (60) calendar daysfrom the date of filing the Letter of Intent.

Upon compliance by the Contractor with all the requirementsand payment of conversion fee (Annex 5-A), the application forconversion shall be evaluated and approved subject to Chapters VI andVII and all other applicable provisions of the Act and theseimplementing rules and regulations: Provided, That the term of the newMineral Agreement or FTAA shall be equivalent to the remaining periodof the original Agreement.

Section 46. Transfer or Assignment of Mineral Agreement

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A Contractor may file an application for the total or partialtransfer or assignment of its Mineral Agreement to a Qualified Person(s)upon payment of an application fee (Annex 5-A) with theBureau/concerned Regional Office for evaluation. No application shallbe accepted for filing unless accompanied by the pertinent Deed ofAssignment that shall contain, among others, a stipulation that thetransferee/assignee assumes all obligations of the transferor/assignorunder the Agreement. Any transfer or assignment of rights andobligations under any Mineral Agreement shall be subject to theapproval of the Secretary upon the recommendation of the Director:Provided, That any transfer or assignment of a Mineral Agreement shallnot be approved unless the transferor/assignor or Contractor hascomplied with all the terms and conditions of the Agreement and theprovisions of the Act and these implementing rules and regulations at thetime of transfer/assignment: Provided, further, That any transfer orassignment shall be deemed automatically approved if not acted uponby the Secretary within thirty (30) calendar days from official receiptthereof, unless patently unconstitutional, illegal or where such transfer orassignment is violative of pertinent rules and regulations: Provided,finally, That the transferee assumes all the obligations andresponsibilities of the transferor/assignor under the Mineral Agreement.

If circumstances warrant and upon the recommendation of theDirector, the Secretary may impose additional conditions for theapproval of transfer/assignment of the Mineral Agreement.

Section 47. Withdrawal from a Mineral Agreement

The Contractor shall manifest in writing its request to theDirector, copy furnished the concerned Regional Director, forwithdrawal from the Mineral Agreement, if in its judgment the miningproject is no longer economically feasible, even after it has exertedreasonable diligence to remedy the cause(s) or situation(s).

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After verification and validation by the Bureau and uponcompliance or satisfaction of all the Contractor's financial, fiscal,environmental and legal obligations at the time of withdrawal, theDirector within a period of thirty (30) calendar days shall send anacceptance notice of withdrawal to the Contractor, cause the openingof the subject area to mining applications and release the Contractor'sfinancial guaranty/performance bond.

Section 48. Issuance of Special Mines Permit

All holders of lease contracts which are about to expire andQuarry Permits/licenses with pending Mineral Agreement applicationsmay file an application for Special Mines Permit with theBureau/concerned Regional Office. A Special Mines Permit (SMP)may be issued by the Director/concerned Regional Director uponclearance by the Secretary and shall be for a period of one (1) yearfrom the expiration of the lease contract or Quarry Permit/license,renewable once, subject to the following conditions and requirements:

a. That the applicant is already operating or hascompleted the development/construction stageand is ready to begin operations subject toverification by the Bureau;

b. That the applicant has already submitted aproposed Mineral Agreement;

c. That the applicant has submitted a one-yearWork Program duly prepared, signed andsealed by a licensed Mining Engineer, Geologistor Metallurgical Engineer;

d. Submission of Environmental ComplianceCertificate, including proof of compliancetherewith, if applicable;

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e. Submission of Environmental Protection andEnhancement Program (MGB Form No. 16-2)as provided for in Section 169 hereof;

f. Submission of proof of satisfactoryEnvironmental Management Record andCommunity Relations Record, if applicable;

g. Posting of Surety Bond prior to registration ofthe SMP; and

h. Such other conditions and requirements notinconsistent with the Act and theseimplementing rules and regulations, as well asthose which the Secretary may deem to be forthe national interest and public welfare.

Provided, That quarterly progress production reports shall besubmitted by the holders of Special Mines Permits covering the subjectareas for the purpose of computing the share of the Government fromproduction as provided for in Chapter XXI hereof. Such share of theGovernment shall be the excise tax as provided for in R.A. No. 7729.

CHAPTER VIIFINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT

Section 49. Eligibility of Applicant for Financial or TechnicalAssistance Agreement (FTAA)

Any Qualified Person may apply for an FTAA for large-scaleexploration, development and utilization of mineral resources asenumerated in Section 50 hereof.

Section 50. Minerals Subject of FTAA

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An FTAA may be entered into for the exploration, developmentand utilization of gold, copper, nickel, chromite, lead, zinc and otherminerals: Provided, That no FTAAs may be granted with respect tocement raw materials, marble, granite, sand and gravel and constructionaggregates.

Section 51. Maximum Areas Allowed under an FTAA

The maximum FTAA contract area that may be applied for orgranted per Qualified Person in the entire Philippines shall be as follows:

a. One thousand (1,000) meridional blocks orapproximately eighty-one thousand (81,000)hectares onshore,

b. Four thousand (4,000) meridional blocks orapproximately three hundred twenty-fourthousand (324,000) hectares offshore or

c. Combination of one thousand (1,000)meridional blocks onshore and four thousand(4,000) meridional blocks offshore.

Section 52. Term of an FTAA

An FTAA shall have a term not exceeding twenty-five (25)years from the date of execution thereof, and renewable for anotherterm not exceeding twenty-five (25) years under such terms andconditions as may be provided for by law and mutually agreed upon bythe parties. The activities of each phase of mining operations must becompleted within the following periods:

a. Exploration - up to two (2) years from date ofFTAA execution, extendible for another two(2) years subject to the following requirements:

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1. Justification of renewal;2. Comprehensive and validated technical

report on the outcome of the two-yearexploration works, includingenvironmental effects duly prepared,signed and sealed by a licensed MiningEngineer or Geologist;

3. Audited report of expendituresincurred;

4. Work Program (MGB Form No. 5-4)duly prepared, signed and sealed by alicensed Mining Engineer or Geologist;

5. Relinquishment report; and6. Other supporting papers as the

Department/Bureau/concernedRegional Office may require or theapplicant may submit.

b. Pre-feasibility study, if warranted - up to two(2) years from expiration of the explorationperiod;

c. Feasibility study - up to two (2) years from theexpiration of the exploration/pre-feasibilitystudy period or from declaration of miningproject feasibility; and

d. Development, construction and utilization -remaining years of FTAA.

Any two (2) or more of the above periods may besimultaneously undertaken in one approved contract area, as the needof the Contractor may arise, subject to the pertinent provisions ofSection 59 hereof.

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Section 53. Filing of FTAA Applications/MandatoryRequirements

The FTAA application (MGB Form No. 7-1) shall be filed withthe Bureau for areas inside Mineral Reservations or with the concernedRegional Office for areas outside Mineral Reservations. The proposedcontract area shall be closed to other mining applications for mineralsmentioned in Section 50 hereof, but shall be open for quarry resourcesmining applications upon the written consent of the FTAA applicant andverification by the Bureau/concerned Regional Office, except for sandand gravel applications which shall require no consent thereof:Provided, That if consent is unreasonably withheld, the case shall beresolved by the Panel of Arbitrators.

Any application that transcends into two (2) or more regionsshall be filed with the Regional Office which has the largest areacovered by the application, copy furnished the other concernedRegional Office(s) by the applicant.

Upon payment of the required fees (Annex 5-A), an FTAAapplicant shall file eight (8) sets of the FTAA proposal accompanied bythe following mandatory requirements:

a. Upon filing of the proposal -1. Duly certified Certificate of Registration

issued by the Securities and ExchangeCommission or concerned authorizedGovernment agency;

2. Duly certified Articles of Incorporationand By-Laws;

3. Location map/sketch plan of theproposed contract area showing itsgeographic coordinates/meridional

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block(s) and boundaries in relation tomajor environmental features and otherprojects using NAMRIA topographicmap in a scale of 1:50,000 dulyprepared, signed and sealed by adeputized Geodetic Engineer;

4. Two-year Exploration Work Program(MGB Form No. 5-4) or three-yearDevelopment/Utilization Work Program(MGB Form No. 6-2), as deemedapplicable, duly prepared, signed andsealed by a licensed Mining Engineer,Geologist or Metallurgical Engineer;

5. When applicable, a satisfactoryEnvironmental Management Recordand Community Relations Record asdetermined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or theDepartment Regional Office. Thedetailed guidelines for the determinationand applicability of such records shallbe specified by the Secretary upon therecommendation of the Director;

6. Environmental Work Program (MGBForm No. 16-1 or MGB Form No.16-1A) during the exploration period asprovided for in Section 168 hereof orEnvironmental Compliance Certificateprior to development, constructionand/or utilization and EnvironmentalProtection and Enhancement Program

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(MGB Form No. 16-2) as provided forin Section 169 hereof;

7. Proof of technical competenceincluding, among others, curricula vitaeand track records in mining operationsand environmental management of thetechnical personnel who shall undertakethe activities in accordance with thesubmittedExploration/Development/UtilizationWork Program and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemedapplicable;

8. Certified copies, if any, of ExplorationPermits/contracts, operating contracts,Mining Agreements, leases, permits,transfers, assignments or similaragreements it has entered into with anylocal or foreign juridical and naturalpersons;

9. Proof of financial capability toundertake the activities pursuant toExploration/Development/UtilizationWork Program and EnvironmentalWork/Environmental Protection andEnhancement Program, as deemedapplicable, such as latest AuditedFinancial Statement and whereapplicable, Annual Report for thepreceding year, credit lines, bankguarantees and/or similar negotiableinstruments;

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10. Declaration of the total area covered byapproved/pending FTAA(s)/application(s); and

11. Other supporting papers as theDepartment/ Bureau/ concernedRegional Office may require or theapplicant may submit.

b. Before the approval of the FTAA - Posting offinancial guarantee/performance bond and letterof credit or other forms of negotiableinstruments from any Government-accreditedbonding company or financial institution, infavor of the Government upon notification bythe Secretary, which shall be in any foreigncurrency negotiable with the Bangko Sentral ngPilipinas or in Philippine Peso in such amountequivalent to the expenditure obligations of theapplicant for any year;

c. After the approval of the FTAA but prior toregistration of the same - An authorized capitalof at least Four Million U.S. Dollars(US$4,000,000.00) or its Philippine Pesoequivalent;

d. Prior to construction, development and/orutilization -1. Feasibility Study;2. Approved Survey Plan of the mining

area;3. Environmental Compliance Certificate;

and4. Environmental Protection and

Enhancement Program.

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Provided, That any application with incomplete mandatoryrequirements shall not be accepted.

If the applicant conducts or has conducted mining operations ina foreign country(ies), the Department shall verify the relevantrequirements through the Philippine Embassy(ies) or Consulate(s) basedin such country(ies).

The Regional Office shall regularly provide the Bureau with alist, consolidated map and status report of FTAA applications filed in itsjurisdiction.

Section 54. Area Status/ClearanceWithin fifteen (15) working days from receipt of the FTAA

application, the Bureau/concerned Regional Office(s) shall check in thecontrol maps if the area is free/open for mining applications. TheRegional Office shall also transmit a copy of the location map/sketchplan of the applied area to the pertinent Department sector(s) affectedby the FTAA application for area status, copy furnished the concernedmunicipality(ies)/city(ies) and other relevant offices or agencies of theGovernment for their information. Upon notification of the applicant bythe Regional Office as to transmittal of said document to the concernedDepartment sector(s) and/or Government agency(ies), it shall be theresponsibility of the same applicant to secure the necessary areastatus/consent/clearance from said Department sector(s) and/orGovernment agency(ies). The concerned Department sector(s) mustsubmit the area status/consent/clearance on the proposed contract areawithin thirty (30) working days from receipt of the notice: Provided,That the concerned Department sector(s) can not unreasonably denyarea clearance/consent without legal and/or technical basis: Provided,further, That if the area applied for falls within the administration of two(2) or more Regional Offices, the concerned Regional Office(s) which

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has/have jurisdiction over the lesser area(s) of the application shallfollow the same procedure.

In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/ clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

If the proposed contract area is open for mining applications,the Bureau/concerned Regional Office(s) shall give written notice to theapplicant to pay the corresponding Bureau/Regional Office(s) clearancefee (Annex 5-A): Provided, That if a portion of the area applied for isnot open for mining applications, the concerned Regional Office shall,within fifteen (15) working days from receipt of said written notice,exclude the same from the coverage of FTAA application: Provided,further, That in cases of overlapping of claims/conflicts/complaints fromlandowners, NGOs, LGUs and other concerned stakeholders, theRegional Director shall exert all efforts to resolve the same.

Section 55. Publication/Posting/Radio Announcement of anFTAA Application

Within fifteen (15) working days from receipt of the necessaryarea clearances, the Bureau/concerned Regional Office(s) shall issue tothe applicant the Notice of Application for FTAA for publication,posting and radio announcement which shall be done within fifteen (15)working days from receipt of the Notice. The Notice must contain,among others, the name and complete address of the applicant, durationof the FTAA applied for, extent of operation to be undertaken, arealocation, geographical coordinates/meridional block(s) of the proposedcontract area and location map/sketch plan with index map relative tomajor environmental features and projects and to the nearestmunicipalities.

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The Bureau/concerned Regional Office(s) shall cause thepublication of the Notice once a week for two (2) consecutive weeks intwo (2) newspapers: one of general circulation published in MetroManila and another published in the municipality or province where theproposed contract area is located, if there be such newspapers;otherwise, in the newspaper published in the nearest municipality orprovince.

The Bureau/concerned Regional Office shall also cause theposting for two (2) consecutive weeks of the Notice on the bulletinboards of the Bureau, the concerned Regional Office(s), PENRO(s),CENRO(s) and in the concerned province(s) and municipality(ies),copy furnished the barangay(s) where the proposed contract area islocated. Where necessary, the Notice shall be in a language generallyunderstood in the concerned locality where it is posted.

The radio announcements shall be made daily for two (2)consecutive weeks in a local radio program and shall consist of thename and complete address of the applicant, area location, duration ofthe FTAA applied for and instructions that information regarding suchapplication may be obtained at the Bureau/concerned RegionalOffice(s). The publication and radio announcements shall be at theexpense of the applicant.

Within thirty (30) calendar days from the last date ofpublication/posting/radio announcements, the authorized officer(s) of theconcerned office(s) shall issue a certification(s) that thepublication/posting/radio announcement have been complied with. Anyadverse claim, protest or opposition shall be filed directly, within thirty(30) calendar days from the last date of publication/posting/radioannouncement, with the concerned Regional Office or through anyconcerned PENRO or CENRO for filing in the concerned Regional

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Office for purposes of its resolution by the Panel of Arbitrators pursuantto the provisions of the Act and these implementing rules andregulations. Upon final resolution of any adverse claim, protest oropposition, the Panel of Arbitrators shall issue a Certification to thateffect within five (5) working days from the date of finality of resolutionthereof. Where no adverse claim, protest or opposition is filed after thelapse of the period for filing the adverse claim, protest or opposition, thePanel of Arbitrators shall likewise issue a Certification to that effectwithin five (5) working days therefrom.

However, previously published valid and existing mining claimsare exempted from the publication/posting/radio announcement requiredunder this Section.

No FTAA shall be approved unless the requirements under thisSection are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved by the Panel ofArbitrators.Section 56. Terms and Conditions of an FTAA

The following terms, conditions and warranties shall beincorporated in the FTAA, namely:

a. A firm commitment, in the form of a swornstatement during the existence of theAgreement, that the Contractor shall complywith minimum ground expenditures during theexploration and pre-feasibility periods asfollows:

Year US $/Hectare

1 2 2 2 3 8 4 8

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5 18 6 23

and a minimum investment of Fifty Million USDollars ($50,000,000.00) or its Philippine Pesoequivalent in the case of Filipino Contractor forinfrastructure and development in the contractarea. If a Temporary/Special ExplorationPermit has been issued prior to the approval ofan FTAA, the exploration expenditures incurredshall form part of the expenditures during thefirst year of the exploration period of theFTAA.

In the event that the Contractorexceeds the minimum expenditure requirementin any one (1) year, the amount in excess maybe carried forward and deducted from theminimum expenditure required in the subsequentyear. In case the minimum ground expenditurecommitment for a given year is not met forjustifiable reasons as determined by theBureau/concerned Regional Office, theunexpended amount may be spent on thesubsequent year(s) of the exploration period.

b. A stipulation that the Contractor shall not, byvirtue of the FTAA, acquire any title over thecontract/mining area without prejudice to theacquisition by the Contractor of the land/surfacerights through any mode of acquisition providedfor by law;

c. Representations and warranties that theContractor has, or has access to, all thefinancing, managerial and technical capability

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and technology required to promptly andeffectively carry out the objectives of theAgreement with the understanding to timelyutilize these resources under its supervisionpursuant to the periodic work programs andrelated budgets, and when proper, providing anexploration period up to two (2) years,extendible for another two (2) years, subject toannual review by the Secretary in accordancewith these implementing rules and regulations;

d. Representations and warranties that theapplicant has all the qualifications and none ofthe disqualifications for entering into theAgreement;

e. A stipulation that the Contractor shall relinquishits contract area pursuant to Section 60 hereof;

f. Representations and warranties that, except forpayments for dispositions for its equity, foreigninvestments in local enterprises which arequalified for repatriation, and local supplier'scredits and such other generally accepted andpermissible financial schemes for raising fundsfor valid business purposes, the Contractor shallnot raise any form of financing from domesticsources of funds, whether in Philippine orforeign currency, for conducting its miningoperations for and in the contract/mining area;

g. A stipulation that the mining operations shall beconducted in accordance with the provisions ofthe Act and these implementing rules andregulations;

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h. A stipulation that the Contractor shall performits activities within the periods expressed in theFTAA plans and work programs, save as maybe excused by force majeure;

i. A stipulation that the Contractor shall givepreference to goods and services produced andoffered in the Philippines of comparative qualityand cost. In particular, the Contractor shallgive preference to qualified Filipino constructionenterprises, construction materials and skillsavailable in the Philippines, Filipino sub-contractors for road construction andtransportation and Philippine householdequipment, furniture and food;

j. A stipulation that the Contractor is obliged togive preference to Filipinos in all types of miningemployment for which they are qualified andthat the technology shall be transferred to thesame;

k. A stipulation that the Contractor shall notdiscriminate on the basis of gender and that theContractor shall respect the right of womenworkers to participate in policy and decision-making processes affecting their rights andbenefits;

l. A stipulation requiring the Contractor toeffectively use the best available appropriateanti-pollution technology and facilities to protectthe environment and to restore or rehabilitatemined-out areas and other areas affected bymine waste/mill tailings and other forms ofpollution or destruction in compliance with therequirements of the ECC and P.D. No. 984.

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This should be undertaken in coordination withthe EMB/Department Regional Office;

m. A stipulation that the Contractor shall furnish theGovernment an annual report of its miningoperations and records of geologic, accountingand other relevant data, and that book ofaccounts and records shall be open forinspection by the Government;

n. A stipulation requiring the Contractor todispose of the minerals and by-productsproduced at the highest market price and tonegotiate for more advantageous terms andconditions subject to the right to enter into long-term sales or marketing contracts or foreignexchange and commodity hedging contractswhich the Government acknowledges to beacceptable notwithstanding that the sale price ofthe minerals may from time to time be lower, orthe terms and conditions of sales are lessfavorable, than that available elsewhere:Provided, That the Bureau is furnished a copyof the said Sale Agreement subject toconfidentiality between the Bureau and theContractor;

o. A stipulation providing for consultation andarbitration with respect to the interpretation andimplementation of the terms and conditions ofthe Agreement;

p. A stipulation that the Contractor shall pay fees,taxes, royalties, shares and other obligations inaccordance with existing laws, rules andregulations;

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q. A stipulation that alien employment shall belimited to technologies requiring highlyspecialized training and experience subject tothe required approval under existing laws, rulesand regulations;

r. A stipulation that in every case where foreigntechnologies are utilized and where alienexecutives are employed, an effective programof training understudies shall be undertaken;

s. A stipulation that the Contractor shall conformwith laws, rules and regulations regarding,among others, labor, safety and healthstandards:

t. A stipulation that the Contractor shall confine itsmining operations to its contract/mining areaand that it shall not interfere with the rights ofother Contractors/ Lessees/operators/Permittees/Permit Holders;

u. A stipulation that the Contractor shall recognizeand respect the rights, customs and traditions oflocal communities, particularly IndigenousCultural Communities;

v. A stipulation that the Contractor shall contributeto the development of the host and neighboringcommunities of the mining area, localgeoscience and mining technology inaccordance with Chapter XIV hereof;

w. A stipulation that the Contractor shall complywith its obligations under its EnvironmentalProtection and Enhancement Program (EPEP)and its Annual EPEP, including the allocation ofthe prescribed annual environmental expensepursuant to Section 171 hereof;

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x. A stipulation that the Contractor shall utilize thebest available appropriate and efficient miningand processing technologies;

y. A stipulation that the Contractor shall undertakeexploration work on the area as specified in itsAgreement based on an approved WorkProgram: Provided, That a negative variance ofat least twenty percent (20%) in the WorkProgram and corresponding expenditures shallbe subject to approval of theDirector/concerned Regional Director;

z. A stipulation that the Contractor shall submitannually starting from the date of approval ofthe Agreement, progress reports of theexploration activities in the prescribed form.This shall be accompanied by raw geologic,geophysical and geochemical data plotted in a1:50,000 scale map, at a minimum. A quarterlyreport containing activities and accomplishmentsfor each quarter shall also be submitted. At theend of the exploration term, the Contractor shallsubmit the final report with the detailed list ofactivities with the corresponding expenditures.The final report shall be accompanied by a1:50,000 geologic map of the contract areaacceptable by international standards. Allreports referred to herein shall be submitted tothe Bureau/concerned Regional Office;

aa. A stipulation that the FTAA shall be canceled,revoked or terminated for failure of theContractor to comply with the terms andconditions thereof or for other grounds asprovided for in Section 230 hereof.

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Should an FTAA be canceled, revokedor terminated, it shall no longer be required tomeet the minimum expenditure requirement forthe remaining period: Provided, That suchcancellation, revocation or termination is inaccordance with Section 68 hereof.

ab. A stipulation that withdrawal by the Contractorfrom the FTAA shall not release it from any andall financial, environmental, legal and/or fiscalobligations including settlement of all obligationsthat should have accrued to the Governmentduring the term of the FTAA;

ac. A stipulation that the Contractor shall complywith all other applicable provisions of the Actand these implementing rules and regulations;and

ad. Such other terms and conditions notinconsistent with the Constitution, the Act andthese implementing rules and regulations, as wellas those which the Secretary may deem to befor the national interest and public welfare.

The Department shall formulate and promulgate such otherrules, regulations and guidelines necessary to ensure compliance withthe terms and conditions herein stated and to establish a fixed and stablefiscal regime with respect to FTAAs.

Section 57. Transfer or Assignment of FTAA Application

Transfer or assignment of FTAA applications shall be allowedsubject to the approval of the Director/concerned Regional Directortaking into account the national interest and public welfare: Provided,

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That such transfer or assignment shall be subject to eligibilityrequirements and shall not be allowed in cases involving speculation.

Section 58. The Negotiating Panel

An FTAA shall be negotiated by the Department through aNegotiating Panel composed of the following:

a. The Secretary - Chairb. The Director - Vice-Chairc. Representative from the Board of Investments

or Department of Trade and Industry - Memberd. Representative from the National Economic

and Development Authority - Membere. Representative from the Department of Finance- Memberf. Representative from the Department's Field

Operations Office - Memberg. Representative from the Department's Legal

and Legislative Affairs Office - Memberh. Representative(s) from the concerned

Regional Office(s) - Member(s)

Section 59. Evaluation of FTAA Application

Within fifteen (15) working days from receipt of theCertification issued by the Panel of Arbitrators as provided for inSection 55 hereof, the concerned Regional Director shall initiallyevaluate the FTAA applications in areas outside Mineral Reservations.He/She shall thereafter endorse his/her findings to the Bureau for furtherevaluation by the Director within fifteen (15) working days from receiptof forwarded documents. Thereafter, the Director shall endorse thesame to the Negotiating Panel for final evaluation.

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In case of FTAA applications in areas within MineralReservations, within fifteen (15) working days from receipt of theCertification issued by the Panel of Arbitrators as provided for inSection 55 hereof, the same shall be evaluated and endorsed by theDirector to the Negotiating Panel for final evaluation.

The Negotiating Panel shall evaluate the FTAA applicationswithin thirty (30) calendar days from receipt thereof.

In evaluating the FTAA proposal, the Negotiating Panel shalltake into consideration the real contributions to the economic growthand general welfare of the country that will be realized, the developmentof local scientific and technical resources, as well as contribution tocommunity and Local Government development programs.

Section 60. Relinquishment of Areas Covered by FTAA

The contract area shall be subject to relinquishment as follows:

a. At least twenty-five percent (25%) of theoriginal contract area during the first two (2)years of exploration period and at least tenpercent (10%) of the remaining contract areaannually during the extended exploration periodand pre-feasibility study period.

b. During the exploration or pre-feasibility studyperiod, the Contractor shall finally relinquish tothe Government any portion of the contractarea which shall not be necessary for miningoperations and not covered by any declarationof mining feasibility with correspondingsubmission to the Bureau/concerned Regional

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Office of geologic report and pertinent maps inthe scale 1:50,000: Provided, That each miningarea after final relinquishment shall not be morethan five thousand (5,000) hectares: Provided,further, That the Director, with the approval ofthe Secretary, may allow a Contractor to hold alarger mining area depending upon the nature ofthe deposit and subject to Section 50 hereofand technical verification by the Bureau.

c. The Contractor may, at its option, submit to theBureau/concerned Regional Office a declarationof mining project feasibility over any portion ofits contract area prior to the lapse ofexploration or pre-feasibility period. In such anevent, the Contractor shall have the right tocontinue its mineral exploration or feasibilitystudies during the exploration and feasibilityperiods, respectively, in respect to theremaining contract area. Any mining areadeclared out of such remaining contract areamay be covered by the original Agreement oras a separate FTAA subject to Subsection (b)herein.

A separate report of relinquishment shall be submitted to theBureau/concerned Regional Office with a detailed geologic report of therelinquished area accompanied by maps at a scale of 1:50,000 andresults of analyses and corresponding expenditures, among others. Theminimum exploration expenditures for the remaining area afterrelinquishment shall be based on the approved Exploration WorkProgram.

Where the Contractor originally derived its rights to the contractarea from then claimowners or mining right owners, such part of the

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contract area relinquished pursuant to the provisions of Subsections (a),(b) and (c) herein shall be reverted back to the Government. Saidclaimowners or mining right owners shall have preferential rights overthe area: Provided, That within thirty (30) calendar days fromnotification of relinquishment by the Contractor, the former shall signifyits intention to enter into a Mineral Agreement with the Secretary:Provided, further, That all documents necessary for MineralAgreement application shall be submitted within sixty (60) calendardays from receipt of such intention.

Section 61. Negotiation of FTAA

The Negotiating Panel, upon being satisfied of the terms andconditions of the proposed FTAA and with the applicant's compliancewith all the requirements, shall recommend its execution and approval tothe President. Should the Negotiating Panel, however, find some of theterms and conditions unacceptable, it shall calendar the proposedFTAA for negotiation and shall make the corresponding notification tothe applicant. If after the negotiation, the terms and conditionsacceptable to the Negotiating Panel have been incorporated in theproposed FTAA, a Resolution to that effect shall be made within fifteen(15) working days and signed, at least, by the majority of theNegotiating Panel. Based on the Resolution, the Secretary shallforthwith recommend the negotiated FTAA application to the Presidentfor consideration/approval. The President shall notify Congress of theapproved FTAA within thirty (30) calendar days from the date of itsapproval.

Section 62. Temporary Exploration PermitWhile awaiting for the approval of the FTAA application by the

President, the Secretary may, upon the request of the FTAA applicant,issue a one-time non-renewable Temporary Exploration Permit (TEP)with a term not exceeding one (1) year to undertake exploration subject

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to the applicable provisions of Chapter V of these implementing rulesand regulations: Provided, That the term of the TEP shall be deductedfrom the exploration period of the FTAA: Provided, further, That inthe event that the FTAA application is disapproved by the President,the TEP is deemed automatically canceled.

Section 63. Registration of FTAA

Upon approval of the FTAA by the President, the same shall beforwarded to the Bureau for numbering. The Bureau/concernedRegional Office shall notify the Contractor to cause the registration of itsFTAA within fifteen (15) working days from receipt of the writtennotice. Registration is effected only upon payment of the required fees(Annex 5-A). The Bureau/concerned Regional Office shall officiallyrelease the FTAA to the Contractor after registration of the same.

Failure of the Contractor to cause the registration of its FTAAwithin the prescribed period shall be sufficient ground for cancellation ofthe same.

Section 64. Rights and Obligations of the Contractor

The Contractor, its heirs or successors-in-interest shall have theright to exclusively conduct mining operations within the contract areawith full rights of ingress and egress, the right to occupy the same, allother rights provided for in the Act and these implementing rules andregulations; and the obligation to fully comply with the terms andconditions of the FTAA.

Section 65. Conversion of an FTAA into a Mineral Agreement

Subject to verification and validation by the Bureau and to thefinal approval of the Secretary, where the economic viability of the ores

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in the contract area is found to be inadequate to justify large-scalemining operations, the Contractor may, at its option, convert totally orpartially its FTAA into a Mineral Agreement. In such cases, theContractor shall manifest its request for conversion by filing a Letter ofIntent with the Department, copy furnished the Bureau/concernedRegional Office. All revisions to the FTAA required by its conversioninto a Mineral Agreement shall be submitted to the Secretary within six(6) months from the date of filing the Letter of Intent.

In the case of a foreign Contractor, it shall be given a period ofone (1) year from the date of filing the Letter of Intent to satisfy the sixtypercent (60%) Filipino equity requirement, subject to an extension ofanother one (1) year as may be approved by the Secretary taking intoconsideration the economic and other relevant factors. Uponcompliance by the Contractor with all the requirements and payment ofconversion fee (Annex 5-A), the application for conversion shall beevaluated and approved subject to Chapter VI hereof and all otherapplicable provisions of the Act and these implementing rules andregulations: Provided, That the term of the new Mineral Agreementshall be equivalent to the remaining period of the FTAA. A copy of theMineral Agreement shall be submitted to the President.

Failure of the Contractor to meet the sixty percent (60%) equityrequirement within the prescribed period shall cause the forfeiture of theContractor's right to such conversion.

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Section 66. Transfer or Assignment of FTAA

A Contractor may file an application for the total or partialtransfer or assignment of its FTAA to a Qualified Person(s) uponpayment of an application fee (Annex 5-A) with the Bureau/concernedRegional Office for evaluation. No application shall be accepted forfiling unless accompanied by the pertinent Deed of Assignment that shallcontain, among others, a stipulation that the transferee/assignee assumesall obligations of the transferor/assignor under the FTAA. Uponendorsement by the Director, the Secretary may recommend to thePresident the transfer or assignment of rights and obligations under anyFTAA for approval: Provided, That any transfer or assignment of anFTAA shall not be approved unless the transferor/assignor orContractor has complied with all the relevant terms and conditions ofthe FTAA and the provisions of the Act and these implementing rulesand regulations at the time of transfer/assignment: Provided, further,That any transfer or assignment shall be deemed automatically approvedif not acted upon by the President within thirty (30) calendar days fromofficial receipt thereof, unless patently unconstitutional, illegal or wheresuch transfer or assignment is violative of pertinent rules and regulations:Provided, finally, That the transferee assumes all the obligations andresponsibilities of the transferor/assignor under the FTAA.

If circumstances warrant and upon the recommendation of theDirector, the Secretary may impose additional conditions for theapproval of the transfer/assignment of the FTAA.

Section 67. Withdrawal from an FTAA

The Contractor shall manifest in writing its request to theSecretary, copy furnished the Director, for withdrawal from theAgreement, if in its judgment the mining project is no longer

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economically feasible, even after it has exerted reasonable diligence toremedy the cause(s) or situation(s).

After verification and validation by the Bureau and uponcompliance or satisfaction of all the Contractor's financial, fiscal,environmental and legal obligations at the time of withdrawal, theSecretary within a period of thirty (30) calendar days shall send anacceptance notice of withdrawal to the Contractor, cause the openingof the subject area to mining applications and release the Contractor'sfinancial guaranty/performance bond.

Section 68. Cancellation/Revocation/Termination of an FTAA

An FTAA may be canceled/revoked/terminated, after dueprocess, under any of the grounds provided for in Chapter XXIV ofthese implementing rules and regulations: Provided, That suchcancellation/revocation/termination shall not release the Contractor fromany and all obligations it may have, particularly with regard to ecologicalmanagement, at the time of cancellation/ revocation/termination.

CHAPTER VIIIQUARRY OPERATIONS

Section 69. General Provisions

Quarry, sand and gravel, guano and gemstone resources inprivate and/or public lands may be extracted, removed, disposedand/or utilized: Provided, That in large-scale quarry operationsinvolving cement raw materials, marble, granite and sand and gravel,any Qualified Person may apply for a Mineral Agreement subject toChapter VI of these implementing rules and regulations.

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Section 70. Provincial/City Mining Regulatory Board

The Provincial/City Mining Regulatory Board shall, amongothers, accept, process and evaluate applications and determineadministrative charges and fees for Quarry, Sand and Gravel, Guano,Gemstone Gathering and Small-Scale Mining Permits duly filed with thesame. It shall be chaired by the concerned Regional Director or his/herduly authorized representative with the following members:

a. Provincial Governor/City Mayor or his/herrepresentative as Vice-Chair,

b. Small-scale mining representative,c. Large-scale mining representative, andd. Department-duly accredited environmental Non

governmental Organization representative.

The concerned Regional Office shall provide the technicalsecretariat to the Provincial/City Mining Regulatory Board.

Section 71. Quarry Permit

Any Qualified Person may apply for a Quarry Permit with theProvincial Governor/City Mayor through the Provincial/City MiningRegulatory Board for the extraction, removal and disposition of quarryresources covering an area of not more than five (5) hectares for a termof five (5) years from date of issuance thereof, renewable for likeperiods but not to exceed a total term of twenty-five (25) years:Provided, That application for renewal shall be filed before the expirydate of the Permit: Provided, further, That the Permit Holder hascomplied with all the terms and conditions of the Permit as providedherein and has not been found guilty of violation of any provision of theAct and these implementing rules and regulations: Provided, finally,That no Quarry Permit shall be issued or granted on any area covered

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by a Mineral Agreement or FTAA, except on areas where a writtenconsent is granted by the Mineral Agreement or FTAA Contractor.

Section 72. Sand and Gravel Permits

a. Commercial Sand and Gravel Permit

Any Qualified Person may apply for aCommercial Sand and Gravel Permit with theProvincial Governor/City Mayor through theProvincial/City Mining Regulatory Board for theextraction, removal and disposition of sand andgravel and other loose or unconsolidatedmaterials which are used in their natural statewithout undergoing processing covering an areaof not more than five (5) hectares for a term ofone (1) year from date of issuance thereof,renewable for like period and in such quantitiesas may be specified in the Permit: Provided,That only one (1) Permit shall be granted to aQualified Person in a municipality at any onetime under such terms and conditions asprovided herein.

b. Industrial Sand and Gravel Permit

Any Qualified Person may apply for anIndustrial Sand and Gravel Permit (MGB FormNos. 8-1 or 8-1A and 8-2 or 8-2A) with theProvincial Governor/City Mayor through theProvincial/City Mining Regulatory Board for theextraction, removal and disposition of sand andgravel and other loose or unconsolidated

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materials that necessitate the use of mechanicalprocessing covering an area of not more thanfive (5) hectares at any one time for a term offive (5) years from date of issuance thereof,renewable for like periods but not to exceed atotal term of twenty-five (25) years: Provided,That any Qualified Person may apply for anIndustrial Sand and Gravel Permit with theRegional Director through the Regional Officefor areas covering more than five (5) hectaresbut not to exceed twenty (20) hectares at anyone time for a term of five (5) years from dateof issuance thereof, renewable for like periodsbut not to exceed a total term of twenty-five(25) years: Provided, further, That only one(1) Permit shall be granted to a QualifiedPerson in a municipality at any one time undersuch terms and conditions as provided herein.

c. Exclusive Sand and Gravel Permit

Any Qualified Person may apply for anExclusive Sand and Gravel Permit (MGB FormNo. 8-4B) with the Provincial Governor/CityMayor through the Provincial/City MiningRegulatory Board for extraction, removal andutilization of sand and gravel and other loose orunconsolidated materials from public land for itsown use covering an area of not more than one(1) hectare for a non-renewable period notexceeding sixty (60) calendar days and amaximum volume of fifty (50) cubic meters:

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Provided, That there will be no commercialdisposition thereof.

Section 73. Gratuitous Permits

a. Government Gratuitous Permit

Any Government entity/ instrumentalityin need of quarry, sand and gravel orloose/unconsolidated materials in theconstruction of building(s) and/or infrastructurefor public use or other purposes may apply fora Government Gratuitous Permit (MGB FormNo. 8-3B) with the Provincial Governor/CityMayor through the Provincial/City MiningRegulatory Board for a period coterminous withthe construction stage of the project but not toexceed one (1) year in public/private land(s)covering an area of not more than two (2)hectares. The applicant shall submit a projectproposal stating where the materials to be takenshall be used and the estimated volume needed.

b. Private Gratuitous Permit

Any landowner may apply for a PrivateGratuitous Permit with the ProvincialGovernor/City Mayor through theProvincial/City Mining Regulatory Board for theextraction, removal and utilization of quarry,sand and gravel or loose/unconsolidatedmaterials from his/her land for a non-renewableperiod of sixty (60) calendar days: Provided,

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That there is adequate proof of ownership andthat the materials shall be for personal use.

Section 74. Mandatory Requirements for Quarry orCommercial/Industrial Sand and Gravel PermitApplication

The application for Quarry or Sand and Gravel Permit (MGBForm No. 8-3, 8-3A, 8-4 or 8-4A) shall be filed by the applicant eitherpersonally or through its duly authorized representative with theconcerned Regional Office/Provincial/City Mining Regulatory Board:Provided, That any application that transcends into two (2) or moreregions/provinces/cities shall be filed with the RegionalOffice/Provincial/City Mining Regulatory Board which has the largestarea covered by the application, copy furnished the other concernedRegional Office(s)/Provincial/City Mining Regulatory Board by theapplicant: Provided, further, That a permit application shall beaccepted only upon payment of the required fees (Annex 5-A) to theconcerned Regional Office/Provincial/City Mining Regulatory Board:Provided, finally, That any application with incomplete mandatoryrequirements shall not be accepted.

Upon payment of the filing and processing fees (Annex 5-A),the applicant shall submit at least two (2) sets of the followingmandatory requirements applicable to the type of permit applied for:

a. Location map/sketch plan of the proposedpermit area showing its geographiccoordinates/meridional block(s) and boundariesin relation to major environmental features andother projects using NAMRIA topographicmap in a scale of 1:50,000 duly prepared,signed and sealed by a deputized GeodeticEngineer;

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b. Area clearance from the concernedGovernment agencies/Local Government Unitsthat may be affected by the permit applicationor written permission from the landowner(s)and surface owner(s) of the area applied for;

c. Work Program (MGB Form No. 5-4 or MGBForm No. 6-2) duly prepared, signed andsealed by a licensed Mining Engineer orGeologist;

d. When applicable, a satisfactory EnvironmentalManagement Record and Community RelationsRecord as determined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or the DepartmentRegional Office. The detailed guidelines for thedetermination and applicability of such recordsshall be specified by the Secretary upon therecommendation of the Director;

e. Environmental Compliance Certificate prior toextraction, removal and/or disposition andEnvironmental Protection and EnhancementProgram (MGB Form No. 16-2) as providedfor in Section 169 hereof;

f. Proof of technical competence including, amongothers, curricula vitae and track records inmining operations and environmentalmanagement of the technical personnel whoshall undertake the activities in accordance withthe submitted Work Program andEnvironmental Protection and EnhancementProgram;

g. Proof of financial capability to undertake theactivities pursuant to Work Program and

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Environmental Protection and EnhancementProgram, such as the following:

1. For individuals - Statement of assetsand liabilities duly sworn in accordancewith existing laws, credit lines andincome tax return for the precedingthree (3) years and

2. For corporations, partnerships,associations or cooperatives - LatestAudited Financial Statement and whereapplicable, Annual Report for thepreceding year, credit lines, bankguarantees and/or similar negotiableinstruments.

h. Photocopy of Articles ofIncorporation/Partnership/Association, By-Laws and Certificate of Registration, dulycertified by the Securities and ExchangeCommission (SEC) or concerned authorizedGovernment agency(ies), for corporations,partnerships, associations or cooperatives; and

i. Other supporting papers as the concernedRegional Office/Provincial/City MiningRegulatory Board may require or the applicantmay submit.

Section 75. Area Status/Clearance for a Quarry or Sand andGravel Permit Application

Within fifteen (15) working days from receipt of the permitapplication, the concerned Regional Office/Provincial/City MiningRegulatory Board shall transmit a copy of the location map/sketch planof the applied area to the concerned Regional Office/pertinent

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Department sector(s) affected by the permit application for area status,copy furnished the concerned municipality(ies)/city(ies) and otherrelevant offices or agencies of the Government for their information.Upon notification of the applicant by the concerned RegionalOffice/Provincial/City Mining Regulatory Board as to transmittal of saiddocument to the concerned Regional Office(s)/Departmentsector(s)/Government agency(ies), it shall be the responsibility of thesame applicant to secure the necessary area status/consent/clearancefrom said Regional Office(s)/Department sector(s)/Governmentagency(ies). The concerned Regional Office(s)/Department sector(s)must submit the area status/consent/clearance on the proposed permitarea within thirty (30) working days from receipt of the notice:Provided, That the concerned Department sector(s) can notunreasonably deny area clearance/consent without legal and/or technicalbasis: Provided, further, That if the area applied for falls within theadministration of two (2) or more Regional Offices/Provincial/CityMining Regulatory Boards, the concerned Regional Office(s)/Provincial/City Mining Regulatory Board which has/have jurisdiction over thelesser area(s) of the application shall follow the same procedure.

In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/ clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

Within fifteen (15) working days from receipt of the permitapplication, the concerned Regional Office(s) shall check in the controlmaps if the area is free/open for mining applications.

If the proposed permit area is open for mining applications, theconcerned Regional Office(s) shall give written notice to the applicant topay the corresponding Regional Office(s) clearance fee (Annex 5-A):Provided, That if a portion of the area applied for is not open formining applications, the concerned Regional Office shall, within fifteen

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(15) working days from receipt of said written notice, exclude the samefrom the coverage of permit application: Provided, further, That incases of overlapping of claims/conflicts/complaints from landowners,NGOs, LGUs and other concerned stakeholders, the concernedRegional Director/Provincial Governor/City Mayor shall exert all effortsto resolve the same.

Section 76. Posting of a Quarry or Sand and Gravel PermitApplication

Within fifteen (15) working days from receipt of the necessaryarea clearances, the concerned Regional Office(s)/Provincial/CityMining Regulatory Board shall issue to the applicant the Notice ofApplication for permit for posting which shall be done within fifteen (15)working days from receipt of the Notice. The Notice must contain,among others, the name and complete address of the applicant, durationof the permit applied for, extent of operation to be undertaken, arealocation, geographical coordinates/meridional block(s) of the proposedpermit area and location map/sketch plan with index map relative tomajor environmental features and projects and to the nearestmunicipalities.

The concerned Regional Office/Provincial/City MiningRegulatory Board shall cause the posting for two (2) consecutive weeksof the Notice on the bulletin boards of the concerned RegionalOffice(s), PENRO(s), CENRO(s) and in the concerned province(s)and municipality(ies), copy furnished the barangay(s) where theproposed permit area is located. Where necessary, the Notice shall bein a language generally understood in the concerned locality where it isposted.

Within thirty (30) calendar days from the last date of posting,the authorized officer(s) of the concerned office(s) shall issue acertification(s) that the posting have been complied with. Any adverse

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claim, protest or opposition shall be filed directly, within thirty (30)calendar days from the last date of posting, with the concerned RegionalOffice or through any concerned PENRO or CENRO for filing in theconcerned Regional Office for purposes of its resolution by the Panel ofArbitrators pursuant to the provisions of the Act and these implementingrules and regulations. Upon final resolution of any adverse claim,protest or opposition, the Panel of Arbitrators shall issue a Certificationto that effect within five (5) working days from the date of finality ofresolution thereof. Where no adverse claim, protest or opposition isfiled after the lapse of the period for filing the adverse claim, protest oropposition, the Panel of Arbitrators shall likewise issue a Certification tothat effect within five (5) working days therefrom.

No permit shall be approved unless the requirements under thisSection are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved by the Panel ofArbitrators.

Section 77. Processing/Registration/Issuance of a Quarry orSand and Gravel Permit

Upon evaluation that all the terms and conditions are in orderand that the subject area has been cleared from any conflict, theconcerned Regional Director/Provincial Governor/City Mayor shallapprove and issue the Permit within thirty (30) calendar days from suchevaluation and shall notify the Permit Holder to cause the registration ofthe same within fifteen (15) working days from receipt of the writtennotice. Registration is effected only upon payment of the required fees(Annex 5-A). The concerned Regional Office/Provincial/City MiningRegulatory Board shall officially release the Permit to the Permit Holderafter registration.

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Failure of the Permit Holder to cause the registration of itsPermit within the prescribed period shall be a sufficient ground forcancellation of the same.

Section 78. Rights and Obligations of the Quarry orCommercial/Industrial Sand and Gravel PermitHolder

The Quarry or Sand and Gravel Permit Holder, its heirs orsuccessors-in-interest shall have the right to exclusively extract, remove,dispose and/or utilize quarry or sand and gravel resources within thepermit area with full rights of ingress and egress, the right to occupy thesame, all other rights provided for in the Act and these implementingrules and regulations; and the obligation to fully comply with the termsand conditions of the Permit.

Section 79. General Terms and Conditions of aQuarry/Commercial or Industrial Sand andGravel/Government Gratuitous/Guano/GemstoneGathering Permit

The following terms and conditions shall be incorporated in theQuarry/Commercial or Industrial Sand and Gravel/GovernmentGratuitous/Guano/Gemstone Gathering Permit:

a. No extraction, removal and/or disposition ofmaterials shall be allowed within a distance ofone (1) kilometer from the boundaries ofreservoirs established for public water supply,archaeological and historical sites or of anypublic or private works or structures, unless theprior clearance of the concerned Governmentagency(ies) or owner is obtained. No

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extraction, removal and/or disposition ofmaterials shall likewise be allowed in offshoreareas within five hundred (500) meters distancefrom the coast and two hundred (200) metersfrom the mean low tide level along the beach;

b. The extraction, removal and/or disposition ofmaterials under the Permit shall be confinedwithin the area specified therein, the boundariesof which, according to the application, areestablished on the ground with prominentmarks;

c. The Permit Holder shall assume fullresponsibility and be liable for damages toprivate and/or public property(ies) that may beoccasioned by its operations under the Permit;

d. The Permit Holder shall manage its operationsin a technically and environmentally responsiblemanner to achieve a safe, non-polluting andself-sustaining post disturbance landform;

e. The Permit Holder shall conduct its operationsin accordance with the provisions of the Actand these implementing rules and regulations;

f. The Permit Holder shall not discriminate on thebasis of gender and that the Permit Holder shallrespect the right of women workers toparticipate in policy and decision-makingprocesses affecting their rights and benefits;

g. The Permit Holder shall conform to laws, rulesand regulations regarding, among others, labor,safety and health standards;

h. The Permit Holder shall not interfere with therights of other Permit Holders/operators/Contractors;

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i. The Permit Holder shall recognize and respectthe rights, customs and traditions of localcommunities, particularly Indigenous CulturalCommunities;

j. The Permit Holder shall immediately stopdigging and extracting materials the momentman-made articles or artifacts are found. Itshall notify the Director of the National Museumof such findings, in which case, the digging shallbe under the supervision of the NationalMuseum until said artifacts are recovered; and

k. The Permit shall be subject to cancellation,revocation and termination as provided for inSection 100 hereof.

Section 80. Specific Terms and Conditions of a Quarryor Commercial/Industrial Sand and Gravelor Government Gratuitous Permit

In addition to those mentioned in Section 79 hereof, thefollowing specific terms and conditions shall be incorporated inthe Quarry or Commercial/Industrial Sand and Gravel orGovernment Gratuitous Permit:

a. For Quarry or Commercial/Industrial Sand andGravel Permit:

1. The Permit shall be for the exclusive useand benefit of the Permit Holder andshall not be transferred or assignedwithout prior written approval by the

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concerned Regional Director/ProvincialGovernor/City Mayor;

2. Unless otherwise renewed or amended,the Permit shall ipso facto terminateafter the whole quantity and kind ofmaterials specified therein have beenremoved or taken;

3. The Permit Holder shall file quarterlywith the concerned RegionalOffice/Provincial/City MiningRegulatory Board a sworn statement ofthe quantity of materials extracted,removed and/or disposed under thePermit and the amounts of fees paidtherefor. At the end of the term, thePermit Holder shall submit to theconcerned Regional Office/Provincial/City Mining RegulatoryBoard a final report with the detailed listof activities and the correspondingexpenditures;

4. The Permit Holder shall furnish theGovernment records of accounting andother relevant data from its operationsand that book of accounts and recordsshall be open for inspection by theGovernment;

5. The Permit/permit area can beinspected and examined at all times bythe concerned RegionalDirector/Provincial Governor/CityMayor;

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6. The Permit Holder shall not, by virtueof the Permit, acquire any title over thepermit area, without prejudice to itsacquisition of the land/surface rightsthrough any mode of acquisitionprovided by law;

7. The Permit Holder shall pay fees, taxesand other obligations in accordancewith existing laws, rules and regulations;

8. The Permit Holder shall comply with itsobligations under its ECC,Environmental Protection andEnhancement Program (EPEP) andAnnual EPEP, including the allocationof the prescribed annual environmentalexpense pursuant to Section 171hereof;

9. The term of the Permit shall be for aperiod as specified therein from date ofissuance thereof: Provided, That norenewal of Permit shall be allowedunless the Permit Holder has compliedwith the terms and conditions of thePermit and shall not have been foundguilty of violation of any provision of theAct and these implementing rules andregulations; and

10. The Permit Holder shall comply with pertinentprovisions of the Act, these implementing rules andregulations and such other terms and conditions notinconsistent with the Constitution, the Act and these rulesand regulations, as well as those which the concernedRegional Director/Provincial Governor/ City

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Mayor may deem to be for the nationalinterest and public welfare.

b. For Government Gratuitous Permit:1. The period of the Permit shall be

coterminous with the term of theconstruction stage of the project but notto exceed one (1) year;

2. The concerned Government office shall,whenever practicable, use and utilize itsown vehicle(s) and equipment inextracting, hauling and transporting thematerials: Provided, That the PermitHolder may enter into a contract with aprivate person/entity for the purpose ofhauling and transporting such materials;

3. The materials authorized to be removedshall be strictly for infrastructure projectand in no case shall the same bedisposed of commercially, otherwise,persons responsible thereof shall beliable for prosecution under appropriatelaws;

4. Unless otherwise amended, the Permitshall ipso facto terminate after thewhole quantity and kind of materialsspecified therein have been removed ortaken;

5. The Permit Holder shall file quarterlywith the concerned Regional Office/Provincial/ City Mining RegulatoryBoard a sworn statement of the quantityof materials extracted, removed and/or

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disposed under the Permit and theamounts of fees paid therefor. At theend of the term, the Permit Holder shallsubmit to the concerned RegionalOffice/ Provincial/City MiningRegulatory Board a final report with thedetailed list of activities and thecorresponding expenditures;

6. The Permit/permit area can beinspected and examined at all times bythe concerned RegionalDirector/Provincial Governor/CityMayor;

7. The Permit Holder shall comply with itsobligations under its ECC andEnvironmental Protection andEnhancement Program (EPEP),including the allocation of theprescribed environmental expensepursuant to Section 171 hereof; and

8. The Permit Holder shall comply withpertinent provisions of the Act, theseimplementing rules and regulations andsuch other terms and conditions notinconsistent with the Constitution, theAct and these rules and regulations, aswell as those which the concernedRegional Director/ ProvincialGovernor/City Mayor may deem to befor the national interest and publicwelfare.

Section 81. Guano Permit

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Any Qualified Person, whose domicile is within the municipalitywhere the area applied for is located, may apply for a Guano Permitwith the Provincial Governor/City Mayor through the Provincial/CityMining Regulatory Board for the extraction, removal, disposition,and/or utilization of loose unconsolidated guano and other organicfertilizer deposits in specific caves and/or confined sites for a term ofone (1) year or upon the extraction of the quantity as specified in thePermit: Provided, That only one (1) Guano Permit shall be issued forthe same cave or area: Provided, further, That the maximum area forthe Guano Permit that a Qualified Person may hold at any one (1) timeshall not be more than five (5) hectares.

a. Gratuitous Guano Permit

A Gratuitous Guano Permit (MGBForm No. 8-6) may be granted to an individualfor his/her personal use or to any Governmentagency in need of the material within a specifiedperiod and in such quantity not more than twothousand kilograms (2,000 kg).

b. Commercial Guano Permit

A Commercial Permit may be grantedto a Qualified Person for sale or commercialdisposition thereof within a specified period andin such quantity as may be specified thereof.

Section 82. Mandatory Requirements for Guano PermitApplication

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The permit application (MGB Form No. 8-5) shall be filed bythe applicant either personally or through its duly authorizedrepresentative with the Provincial/City Mining Regulatory Board:Provided, That any application that transcends into two (2) or moreregions shall be filed with the Provincial/City Mining Regulatory Boardwhich has the largest area covered by the application, copy furnishedthe other concerned Provincial/City Mining Regulatory Board by theapplicant: Provided, further, That a permit application shall beaccepted only upon payment of the required fees (Annex 5-A) to theProvincial/City Mining Regulatory Board: Provided, finally, That anyapplication with incomplete mandatory requirements shall not beaccepted.

Upon payment of the filing and processing fees (Annex 5-A),the applicant shall submit at least two (2) sets of the followingmandatory requirements applicable to the type of permit applied for:

a. Location map/sketch plan of the proposedpermit area showing its geographiccoordinates/meridional block(s) and boundariesin relation to major environmental features andother projects using NAMRIA topographicmap in a scale of 1:50,000 duly prepared,signed and sealed by a deputized GeodeticEngineer;

b. Certification from the Barangay Captain that theapplicant has established domicile in the areaapplied for;

c. Area clearance from the concernedGovernment agencies/Local Government Unitsthat may be affected by the permit applicationor written permission from the landowner(s)and surface owner(s) of the area applied for;

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d. Environmental Compliance Certificate prior toextraction, removal, disposition and/orutilization and Environmental Protection andEnhancement Program (MGB Form No. 16-2)as provided for in Section 169 hereof;

e. Declaration of the approximate quantity ofguano resources available in the permit areaapplied for; and

f. Other supporting papers as the concernedProvincial/City Mining Regulatory Board mayrequire or the applicant may submit.

Section 83. Area Status/Clearance for a Guano PermitApplication

Within fifteen (15) working days from receipt of the permitapplication, the concerned Provincial/City Mining Regulatory Boardshall transmit a copy of the location map/sketch plan of the applied areato the concerned Regional Office/pertinent Department sector(s)affected by the permit application for area status, copy furnished theconcerned municipality(ies)/city(ies) and other relevant offices oragencies of the Government for their information. Upon notification ofthe applicant by the concerned Provincial/City Mining Regulatory Boardas to transmittal of said document to the concerned RegionalOffice(s)/Department sector(s)/Government agency(ies), it shall be theresponsibility of the same applicant to secure the necessary areastatus/consent/clearance from said Regional Office(s)/Departmentsector(s)/Government agency(ies). The concerned RegionalOffice(s)/Department sector(s) must submit the areastatus/consent/clearance on the proposed permit area within thirty (30)working days from receipt of the notice: Provided, That the concernedDepartment sector(s) can not unreasonably deny areaclearance/consent without legal and/or technical basis: Provided,further, That if the area applied for falls within the administration of two(2) or more Provincial/City Mining Regulatory Boards, the concerned

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Provincial/City Mining Regulatory Board(s) which has/have jurisdictionover the lesser area(s) of the application shall follow the sameprocedure.

In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/ clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

Within fifteen (15) working days from receipt of the permitapplication, the concerned Regional Office(s) shall check in the controlmaps if the area is free/open for mining applications.

If the proposed permit area is open for mining applications, theconcerned Regional Office(s) shall give written notice to the applicant topay the corresponding Regional Office(s) clearance fee (Annex 5-A):Provided, That if a portion of the area applied for is not open formining applications, the concerned Regional Office shall, within fifteen(15) working days from receipt of said written notice, exclude the samefrom the coverage of permit application: Provided, further, That incases of overlapping of claims/conflicts/complaints from landowners,NGOs, LGUs and other concerned stakeholders, the concernedRegional Director/Provincial Governor/City Mayor shall exert all effortsto resolve the same.

Section 84. Posting of a Guano Permit Application

Within fifteen (15) working days from receipt of the necessaryarea clearances, the Provincial/City Mining Regulatory Board shall issueto the applicant the Notice of Application for permit for posting whichshall be done within fifteen (15) working days from receipt of theNotice. The Notice must contain, among others, the name andcomplete address of the applicant, duration of the permit applied for,

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extent of operation to be undertaken, area location, geographicalcoordinates/meridional block(s) of the proposed permit area andlocation map/sketch plan with index map relative to majorenvironmental features and projects and to the nearest municipalities.

The Provincial/City Mining Regulatory Board shall cause theposting for two (2) consecutive weeks of the Notice on the bulletinboards of the concerned Regional Office(s), PENRO(s), CENRO(s)and in the concerned province(s) and municipality(ies), copy furnishedthe barangay(s) where the proposed permit area is located. Wherenecessary, the Notice shall be in a language generally understood in theconcerned locality where it is posted.

Within thirty (30) calendar days from the last date of posting,the authorized officer(s) of the concerned office(s) shall issue acertification(s) that the posting have been complied with. Any adverseclaim, protest or opposition shall be filed directly, within thirty (30)calendar days from the last date of posting, with the concerned RegionalOffice or through any concerned PENRO or CENRO for filing in theconcerned Regional Office for purposes of its resolution by the Panel ofArbitrators pursuant to the provisions of the Act and these implementingrules and regulations. Upon final resolution of any adverse claim,protest or opposition, the Panel of Arbitrators shall issue a Certificationto that effect within five (5) working days from the date of finality ofresolution thereof. Where no adverse claim, protest or opposition isfiled after the lapse of the period for filing the adverse claim, protest oropposition, the Panel of Arbitrators shall likewise issue a Certification tothat effect within five (5) working days therefrom.

No permit shall be approved unless the requirements under thisSection are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved by the Panel ofArbitrators.

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Section 85. Processing/Registration/Issuance of a GuanoPermit

Upon evaluation that all the terms and conditions are in orderand that the subject area has been cleared from any conflict, theconcerned Provincial Governor/City Mayor shall approve and issue thePermit within thirty (30) calendar days from such evaluation and shallnotify the Permit Holder to cause the registration of the same withinfifteen (15) working days from receipt of the written notice.Registration is effected only upon payment of the required fees (Annex5-A). The concerned Provincial/City Mining Regulatory Board shallofficially release the Permit to the Permit Holder after registration.

Failure of the Permit Holder to cause the registration of itsPermit within the prescribed period shall be a sufficient ground forcancellation of the same.

Section 86. Rights and Obligations of the Guano PermitHolder

The Guano Permit Holder, its heirs or successors-in-interestshall have the right to exclusively conduct extract, remove, disposeand/or utilize guano resources within the permit area with full rights ofingress and egress, the right to occupy the same, all other rightsprovided for in the Act and these implementing rules and regulations;and the obligation to fully comply with the terms and conditions of thePermit.

Section 87. Specific Terms and Conditions of a Guano Permit

In addition to those mentioned in Section 79 hereof, thefollowing specific terms and conditions shall be incorporated in theCommercial/Industrial Guano Permit:

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a. The Permit shall be for the exclusive use andbenefit of the Permit Holder and shall not betransferred or assigned without prior writtenapproval by the Provincial Governor/CityMayor;

b. No explosives shall be used in extracting and/orremoval of guano;

c. The Permit Holder shall file quarterly with theProvincial/City Mining Regulatory Board asworn statement of the quantity of guanoextracted, removed and/or disposed under thePermit and the amounts of fees paid therefor.At the end of the term, the Permit Holder shallsubmit to the Provincial/City Mining RegulatoryBoard a final report with the detailed list ofactivities and the corresponding expenditures;

d. The Permit/permit area can be inspected andexamined at all times by the concerned RegionalDirector/Provincial Governor/City Mayor;

e. The Permit Holder shall not, by virtue of thePermit, acquire any title over the permit area,without prejudice to its acquisition of theland/surface rights through any mode ofacquisition provided by law;

f. The Permit Holder shall pay fees, taxes andother obligations in accordance with existinglaws, rules and regulations;

g. The Permit Holder shall comply with itsobligations under its ECC, EnvironmentalProtection and Enhancement Program (EPEP)and Annual EPEP, including the allocation ofthe prescribed annual environmental expensepursuant to Section 171 hereof;

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h. The term of the Permit shall be for a period ofone (1) year from date of issuance thereof orupon the extraction of the quantity as specifiedin the Permit; and

i. The Permit Holder shall comply with pertinentprovisions of the Act, these implementing rulesand regulations and such other terms andconditions not inconsistent with the Constitution,the Act and these rules and regulations, as wellas those which the Provincial Governor/CityMayor may deem to be for the national interestand public welfare.

Section 88. Gemstone Gathering Permit

Any Qualified Person may apply for a Gemstone GatheringPermit with the Provincial Governor/City Mayor through theProvincial/City Mining Regulatory Board for the extraction, removal andutilization of loose stones useful as gemstones for a term not exceedingone (1) year from the date of issuance thereof, renewable for likeperiods: Provided, That the application for renewal shall be filed beforethe expiry date of the Permit: Provided, further, That the PermitHolder has complied with all the terms and conditions of the originalPermit as provided herein and has not been found guilty of violation ofany provision of the Act and these implementing rules and regulations.

Section 89. Mandatory Requirements for GemstoneGathering Permit Application

The permit application (MGB Form No. 8-7) shall be filed bythe applicant either personally or through its duly authorized

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representative with the Provincial/City Mining Regulatory Board:Provided, That any application that transcends into two (2) or moreregions shall be filed with the Provincial/City Mining Regulatory Boardwhich has the largest area covered by the application, copy furnishedthe other concerned Provincial/City Mining Regulatory Board by theapplicant: Provided, further, That a permit application shall beaccepted only upon payment of the required fees (Annex 5-A) to theProvincial/City Mining Regulatory Board: Provided, finally, That anyapplication with incomplete mandatory requirements shall not beaccepted.

Upon payment of the filing and processing fees (Annex 5-A),the applicant shall submit at least five (5) sets of the followingmandatory requirements:

a. Location map/sketch plan of the proposedpermit area showing its geographiccoordinates/meridional block(s) and boundariesin relation to major environmental features andother projects using NAMRIA topographicmap in a scale of 1:50,000 duly prepared,signed and sealed by a deputized GeodeticEngineer;

b. Area clearance from the concernedGovernment agencies/Local Government Unitsthat may be affected by the permit applicationor written permission from the landowner(s)and surface owner(s) of the area applied for;

c. Declaration of the approximate quantity ofgemstone available in the permit area appliedfor; and

d. Other supporting papers as the concernedProvincial/City Mining Regulatory Board mayrequire or the applicant may submit.

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Section 90. Area Status/Clearance for a Gemstone GatheringPermit Application

Within fifteen (15) working days from receipt of the permitapplication, the concerned Provincial/City Mining Regulatory Boardshall transmit a copy of the location map/sketch plan of the applied areato the concerned Regional Office/pertinent Department sector(s)affected by the permit application for area status, copy furnished theconcerned municipality(ies)/city(ies) and other relevant offices oragencies of the Government for their information. Upon notification ofthe applicant by the Provincial/City Mining Regulatory Board as totransmittal of said document to the concerned RegionalOffice(s)/Department sector(s)/Government agency(ies), it shall be theresponsibility of the same applicant to secure the necessary areastatus/consent/clearance from said Regional Office(s)/Departmentsector(s)/Government agency(ies). The concerned RegionalOffice(s)/Department sector(s) must submit the areastatus/consent/clearance on the proposed permit area within thirty (30)working days from receipt of the notice: Provided, That the concernedDepartment sector(s) can not unreasonably deny areaclearance/consent without legal and/or technical basis: Provided,further, That if the area applied for falls within the administration of two(2) or more Provincial/City Mining Regulatory Boards, the concernedProvincial/City Mining Regulatory Board which has/have jurisdictionover the lesser area(s) of the application shall follow the sameprocedure.

In reservations/reserves/project areas under the jurisdiction ofthe Department/Bureau/Regional Office(s) where consent/ clearance isdenied, the applicant may appeal the same to the Office of theSecretary.

Within fifteen (15) working days from receipt of the permitapplication, the concerned Regional Office(s) shall check in the controlmaps if the area is free/open for mining applications.

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If the proposed permit area is open for mining applications, theconcerned Regional Office(s) shall give written notice to the applicant topay the corresponding Regional Office(s) clearance fee (Annex 5-A):Provided, That if a portion of the area applied for is not open formining applications, the concerned Regional Office shall, within fifteen(15) working days from receipt of said written notice, exclude the samefrom the coverage of permit application: Provided, further, That incases of overlapping of claims/conflicts/complaints from landowners,NGOs, LGUs and other concerned stakeholders, the concernedRegional Director/Provincial Governor/City Mayor shall exert all effortsto resolve the same.

Section 91. Posting of a Gemstone Gathering PermitApplication

Within fifteen (15) working days from receipt of the necessaryarea clearances, the Provincial/City Mining Regulatory Board shall issueto the applicant the Notice of Application for permit for posting whichshall be done within fifteen (15) working days from receipt of theNotice. The Notice must contain, among others, the name andcomplete address of the applicant, duration of the permit applied for,extent of operation to be undertaken, area location, geographicalcoordinates/meridional block(s) of the proposed permit area andlocation map/sketch plan with index map relative to majorenvironmental features and projects and to the nearest municipalities.

The Provincial/City Mining Regulatory Board shall cause theposting for two (2) consecutive weeks of the Notice on the bulletinboards of the concerned Regional Office(s), PENRO(s), CENRO(s)and in the concerned province(s) and municipality(ies), copy furnishedthe barangay(s) where the proposed permit area is located. Wherenecessary, the Notice shall be in a language generally understood in theconcerned locality where it is posted.

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Within thirty (30) calendar days from the last date of posting,the authorized officer(s) of the concerned office(s) shall issue acertification(s) that the posting have been complied with. Any adverseclaim, protest or opposition shall be filed directly, within thirty (30)calendar days from the last date of posting, with the concerned RegionalOffice or through any concerned PENRO or CENRO for filing in theconcerned Regional Office for purposes of its resolution by the Panel ofArbitrators pursuant to the provisions of the Act and these implementingrules and regulations. Upon final resolution of any adverse claim,protest or opposition, the Panel of Arbitrators shall issue a Certificationto that effect within five (5) working days from the date of finality ofresolution thereof. Where no adverse claim, protest or opposition isfiled after the lapse of the period for filing the adverse claim, protest oropposition, the Panel of Arbitrators shall likewise issue a Certification tothat effect within five (5) working days therefrom.

No permit shall be approved unless the requirements under thisSection are fully complied with and any adverseclaim/protest/opposition thereto is finally resolved by the Panel ofArbitrators.

Section 92. Processing/Registration/Issuance of a GemstoneGathering Permit

Upon evaluation that all the terms and conditions are in orderand that the subject area has been cleared from any conflict, theconcerned Provincial Governor/City Mayor shall approve and issue thePermit (MGB Form No. 8-8) within thirty (30) calendar days from suchevaluation and shall notify the Permit Holder to cause the registration ofthe same within fifteen (15) working days from receipt of the writtennotice. Registration is effected only upon payment of the required fees(Annex 5-A). The concerned Provincial/City Mining Regulatory Boardshall officially release the Permit to the Permit Holder after registration.

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Failure of the Permit Holder to cause the registration of itsPermit within the prescribed period shall be a sufficient ground forcancellation of the same.

Section 93. Rights and Obligations of the GemstoneGathering Permit Holder

The Gemstone Gathering Permit Holder, its heirs or successors-in-interest shall have the right to exclusively conduct extract, removeand dispose loose stones useful as gemstones within the permit areawith full rights of ingress and egress, the right to occupy the same, allother rights provided for in the Act and these implementing rules andregulations; and the obligation to fully comply with the terms andconditions of the Permit.

Section 94. Specific Terms and Conditions of a GemstoneGathering Permit

In addition to those mentioned in Section 79 hereof, thefollowing specific terms and conditions shall be incorporated in theGemstone Gathering Permit:

a. The Permit shall be for the exclusive use andbenefit of the Permit Holder and shall not betransferred or assigned without prior writtenapproval by the Provincial Governor/CityMayor;

b. Gemstone gathering shall be allowed in riversand other locations except in areas which areexpressly prohibited by law;

c. The removal/gathering of gemstones shall beconducted manually without the aid of any toolsor mechanized equipment;

d. No explosives shall be used in extracting and/orremoval of gemstone;

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e. Unless otherwise renewed or amended, thePermit shall ipso facto terminate after the wholequantity of gemstones specified therein havebeen removed or taken;

f. The Permit Holder shall file quarterly with theProvincial/City Mining Regulatory Board asworn report of the quantity of gemstonesextracted, removed and/or disposed under thePermit, the amounts of fees paid therefor, thequantity/volume of gemstones sold or disposedof during the period covered by the report, theirselling prices, the names and addresses of thepersons to whom the same were sold, and thequantity/volume of materials left in stock. Atthe end of the term, the Permit Holder shallsubmit to the Provincial/City Mining RegulatoryBoard a final report with the detailed list ofactivities and the corresponding expenditures;

g. The Permit/permit area can be inspected andexamined at all times by the concerned RegionalDirector/Provincial Governor/City Mayor;

h. The Permit Holder shall not, by virtue of thePermit, acquire any title over the permit area,without prejudice to its acquisition of theland/surface rights through any mode ofacquisition provided by law;

i. The Permit Holder shall pay fees, taxes andother obligations in accordance with existinglaws, rules and regulations;

j. The term of the Permit shall be for a period asspecified therein from date of issuance thereof:Provided, That no renewal of Permit shall beallowed unless the Permit Holder has complied

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with the terms and conditions of the Permit andshall not have been found guilty of violation ofany provision of the Act and these implementingrules and regulations;

k. The Permit Holder shall comply with pertinentprovisions of the Act, these implementing rulesand regulations and such other terms andconditions not inconsistent with the Constitution,the Act and these rules and regulations, as wellas those which the Provincial Governor/CityMayor may deem to be for the national interestand public welfare.

Section 95. Records of Extracted/Removed/DisposedQuarry/Sand and Gravel/Guano/GemstoneResources

The Permit Holder shall keep books of accounts wherein thereshall be entered everyday the quantity of quarry/sand andgravel/guano/gemstone resources removed or extracted from the areaas well as the quantity disposed of or sold during the day, their sellingprices, the names and addresses of the persons or parties to whom thesame were sold or disposed of.

All books of accounts and records required to be kept in thepreceding paragraph shall be open at all times for the inspection of therepresentatives of the concerned Regional Director/ProvincialGovernor/City Mayor. The refusal of the Permit Holder to allow theconcerned authorities to inspect the same without justifiable reason shallbe sufficient ground for the cancellation of the Permit.

Section 96. Surety BondTo answer for and guarantee payment for whatever actual

damages that may be incurred by the quarry or sand and gravel

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operations, a surety bond of Twenty Thousand Pesos (P=20,000.00)shall be posted by the applicants, except for those applying forGratuitous and Exclusive Sand and Gravel Permits.

Section 97. Quarry Fee and Taxes to be Paid

All Permit Holders except those for Gratuitous Permits underthis Chapter shall pay the required quarry fees (Annex 5-A) to theconcerned Provincial/City Treasurer in accordance with pertinentprovisions of the Local Government Code: Provided, That theProvincial Government and the municipality may enter into aMemorandum of Agreement providing for direct remittance of the sharedue the municipality or barangay. Likewise, an excise tax on MineralProducts as provided for in R.A. No. 7729 shall be paid upon removalthereof to the Government through the concerned agent orrepresentative of the Bureau of Internal Revenue.

Section 98. Renewal of Quarry/Commercial or Industrial Sandand Gravel/Guano/Gemstone Gathering Permit

Within sixty (60) calendar days before the expiration of thePermit, the Quarry/Commercial or Industrial Sand andGravel/Guano/Gemstone Gathering Permit Holder may submit to theconcerned Regional Office/Provincial/City Mining Regulatory Board, anapplication to renew the Permit accompanied by two (2) sets of thefollowing applicable mandatory requirements:

a. Justification of renewal;b. Comprehensive and validated technical report

on the outcome of the operations, including theirenvironmental effects duly prepared, signed andsealed by a licensed Mining Engineer orGeologist;

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c. Audited report of expenditures incurred duringthe operations period;

d. Work Program duly prepared, signed andsealed by a licensed Mining Engineer orGeologist;

e. Environmental Protection and EnhancementProgram (MGB Form No. 16-2) as providedfor in Section 169 hereof; and

f. Other supporting papers as the concernedRegional Office/Provincial/City MiningRegulatory Board may require or the applicantmay submit.

After field verification by the concerned RegionalOffice/Provincial/City Mining Regulatory Board of the foregoingrequirements at the expense of the Permit Holder, the concernedRegional Director/Provincial Governor/City Mayor may grant therenewal.Section 99. Transfer or Assignment of Quarry/Commercial or

Industrial Sand and Gravel/Guano/GemstoneGathering Permit

A Quarry/Commercial or Industrial Sand andGravel/Guano/Gemstone Gathering Permit may be transferred orassigned to another Qualified Person(s) subject to the approval of theconcerned Regional Director/Provincial Governor/City Mayor.

Section 100. Cancellation/Revocation/Termination of aQuarry/Sand and Gravel/Gratuitous/Guano/Gemstone Gathering Permit

The Quarry/Sand and Gravel/Gratuitous/Guano/GemstoneGathering Permit may be canceled/revoked/terminated, after due

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process, by the concerned Regional Director/Provincial Governor/CityMayor based on the following grounds:

a. Failure to comply with the terms and conditionsof the Permit and ECC, if applicable;

b. Violation of any provision of the Act and theseimplementing rules and regulations;

c. Failure to pay the excise tax for two (2)consecutive years;

d. Any misrepresentation in any statement made inthe application or those made later in supportthereof;

e. If the commodity stipulated in the Permit hasbeen exhausted before the expiry date thereof;and

f. When national interest and public welfare sorequire or for environmental protection orecological reasons.

Upon cancellation of the Permit, the said areas shallautomatically be reverted back to its original status.

Section 101. Effect of Cancellation/Revocation/Termination ofa Quarry/Sand and Gravel/Gratuitous/Guano/Gemstone Gathering Permit

The foregoing provisions notwithstanding, cancellation/revocation/termination of a Quarry/Sand and Gravel/Gratuitous/Guano/Gemstone Gathering Permit shall not release the Permit Holderfrom any and all obligations it may have, particularly regardingecological management, to the public or private party(ies) at the time ofcancellation/revocation/termination.

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Section 102. Withdrawal from a Quarry/Sand and Gravel/Gratuitous/Guano/Gemstone Gathering Permit

The Permit Holder may, by giving due notice at any time duringthe term of the Permit, apply with the concerned RegionalOffice/Provincial/City Mining Regulatory Board for the withdrawal ofthe Permit due to causes which, in the opinion of the Permit Holder,make continued mining operations no longer feasible or viable. Theconcerned Regional Director/Provincial/City Mining Regulatory Boardshall consider the notice and issue his/her decision within a period ofthirty (30) calendar days: Provided, That the Permit Holder has met allits financial, fiscal, environmental and legal obligations at the time ofwithdrawal.

CHAPTER IXSMALL-SCALE MINING

Section 103. General ProvisionsApplications for Small-Scale Mining Permits shall be filed with

the Provincial Governor/City Mayor through the concernedProvincial/City Mining Regulatory Board for areas outside the MineralReservations and with the Director through the Bureau for areas withinthe Mineral Reservations.

The guidelines and provisions specified in Mines AdministrativeOrder No. MRD-41, Series of 1984, Department AdministrativeOrder No. 28 and MRDB Administrative Order Nos. 3 and 3A whichare the implementing rules and regulations of P.D. No. 1899 and theguidelines and provisions of Department Administrative Order No. 34,Series of 1992 which are the implementing rules and regulations of R.A.No. 7076, insofar as they are not inconsistent with the provisions ofthese implementing rules and regulations, shall continue to govern small-scale mining operations.

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CHAPTER XSURFACE RIGHTS

Section 104. Easement Rights

When mining areas are so situated that for purposes of moreconvenient operations it is necessary to build, construct or install on themining areas or lands owned, occupied or leased by other persons,such infrastructures as roads, railroads, mills, waste dump sites, tailingsponds, warehouses, staging or storage areas and port facilities,tramways, runways, airports, electric transmission, telephone ortelegraph lines, dams and their normal flood and catchment areas, sitesfor waterwells, ditches, canals, new river beds, pipelines, flumes, cuts,shafts, tunnels or mills, the Permittee/Permit Holder/Contractor, uponpayment of just compensation, shall be entitled to enter and occupy saidmining areas or lands.

As to the payment of just compensation mentioned in thepreceding paragraph, the amount thereof shall be first agreed upon bythe parties and in accordance with P.D. No. 512, where appropriate.In case of disagreement, the matter shall be brought before the Panel ofArbitrators for proper disposition.

Section 105. Entry Into LandsThe holder(s) of mining right(s) shall not be prevented from

entry into its/their contract/mining area(s) for the purpose(s) ofexploration, development and/or utilization: Provided, That writtennotice(s) at its/their registered address(es) was/were sent to and dulyreceived by the surface owner(s) of the land(s), occupant(s) andconcessionaire(s) thereof and that a bond is posted in accordance withSection 108 hereof.

If the surface owner(s) of the land, occupant(s) orconcessionaire(s) thereof can not be found, the Permittee/Permit

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Holder/Contractor or concessionaire shall notify the concernedRegional Director, copy furnished the concerned local officials in caseof private land or the concerned Government agency in case ofconcessionaires, attaching thereto a copy of the written notice and asworn declaration by the holder(s) of mining right(s) that it/they hadexerted all efforts to locate such surfaceowner(s)/occupant(s)/concessionaire(s). Such notice(s) to theconcerned Regional Director shall be deemed notice(s) to the surfaceowner(s) and concessionaire(s).

In cases where the surface owner(s) of the land(s), occupant(s)or concessionaire(s) thereof refuse(s) to allow the Permittee/PermitHolder/Contractor entry into the land(s) despite its/their receipt(s) of thewritten notice(s) or refuse(s) to receive said written notice(s) or in caseof disagreement over such entry, the Permittee/PermitHolder/Contractor shall bring the matter before the Panel of Arbitratorsfor proper disposition.

Section 106. Voluntary Agreement

A voluntary agreement between a surface owner, occupant orconcessionaire thereof permitting holders of mining rights to enter intoand use its land for mining purposes shall be registered with theconcerned Regional Office. The said agreement shall be binding uponthe parties, their heirs, successors-in-interest and assigns.

Section 107. Compensation of the Surface Owner and Occupant

Any damage done to the property of the surface owner,occupant, or concessionaire thereof as a consequence of the miningoperations or as a result of the construction or installation of theinfrastructure mentioned in Section 104 above shall be properly andjustly compensated.

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Such compensation shall be based on the agreement enteredinto between the holder of mining rights and the surface owner,occupant or concessionaire thereof or, where appropriate, inaccordance with P.D. No. 512.

In case of disagreement or in the absence of an agreement, thematter shall be brought before the Panel of Arbitrators for properdisposition.

Section 108. Posting of a Bond

In all cases mentioned in the preceding Section, thePermittee/Permit Holder/Contractor shall post a cash or surety bondfrom an accredited surety with the concerned Regional Office. Theamount of the bond shall be agreed upon by the parties. In case ofdisagreement, it shall be determined by the Director for areas insideMineral Reservations and the Regional Director for areas outsideMineral Reservations based on the type of the land and the value of thetrees, plants and other existing improvements thereto.

CHAPTER XIMINERAL PROCESSING PERMIT

Section 109. General ProvisionsNo person shall engage in the processing of minerals without a

Mineral Processing Permit (MGB Form No. 11-1).

In the case of the small-scale miners, the processing of themineral ores and minerals they produced, as well as the licensing of theircustom mills or processing plants, notwithstanding the provisions ofSection 103 hereof, shall continue to be governed by the provisions ofR.A. No. 7076 and P.D. No. 1899 and their implementing rules andregulations.

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In the case of the Contractors, holders of Quarry and IndustrialSand and Gravel Permits, the approved Work Program for theproduction period is sufficient requirement for them to process theirminerals in lieu of the Mineral Processing Permits.

Those who are presently engaged in the said activity shallsecure a Mineral Processing Permit within six (6) months from theeffectivity of these implementing rules and regulations. The term of aMineral Processing Permit shall be for a period of five (5) years fromdate of issuance thereof, renewable for like periods but not to exceed atotal term of twenty-five (25) years: Provided, That no renewal ofPermit shall be allowed unless the Permit Holder has complied with allthe terms and conditions of the Permit and has not been found guilty ofviolation of any provision of the Act and these implementing rules andregulations.

Section 110. Application for Mineral Processing Permit/Mandatory Requirements

An application (MGB Form No. 11-2) for a MineralProcessing Permit shall be filed by a Qualified Person either personallyor through its duly authorized representative with the concernedRegional Office: Provided, That a permit application shall be acceptedonly upon payment of the required fees (Annex 5-A) to the concernedRegional Office: Provided, further, That any application withincomplete mandatory requirements shall not be accepted.

Upon payment of the filing and processing fees (Annex 5-A),the applicant shall submit at least five (5) sets of the followingmandatory requirements:a. Duly certified Certificate of Registration issued by the Securitiesand Exchange Commission or concerned authorized Governmentagency;

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b. Duly certified Articles of Incorporation/Partnership/Association and By-Laws;

c. Location map/sketch plan of the area of theproposed processing plant using NAMRIAtopographic map in a scale of 1:50,000;

d. Feasibility Study including work programs,plant site, mill and plant layout/design, details oftechnology to be employed in the proposedoperation, anti-pollution devices/ measures aswell as the plant capacity;

e. When applicable, a satisfactory EnvironmentalManagement Record and Community RelationsRecord as determined by the Bureau inconsultation with the EnvironmentalManagement Bureau and/or the DepartmentRegional Office. The detailed guidelines for thedetermination and applicability of such recordsshall be specified by the Secretary upon therecommendation of the Director;

f. Environmental Compliance Certificate;g. Proof of technical competence including, among

others, curricula vitae and track records inmineral processing and environmentalmanagement of the technical personnel whoshall undertake the operation;

h. Proof of financial capability to undertake theactivities pursuant to Work Program andEnvironmental Protection and EnhancementProgram, such as latest Audited FinancialStatement and where applicable, Annual Reportfor the preceding year, credit lines, bankguarantees and/or similar negotiableinstruments;

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i. Interim Importation Permit/certification fromEMB on the use of chemicals (e.g. cyanide,mercury) in compliance with R.A. No. 6969;

j. Brief history of applicant's activities for the lastfive (5) years, if any;

k. Supply Contract/Agreement with mining rightsholders, if applicable; and

l. Other supporting papers as the Secretary/Director/concerned Regional Office mayrequire or the applicant may submit.

Section 111. Processing/Registration/Issuance of a MineralProcessing Permit

Within five (5) working days from receipt of application by theRegional Office, it shall initially evaluate and then forward the same tothe Bureau for final review and evaluation by the latter within fifteen (15)working days from receipt thereof. Thereafter, the Director shallendorse the same to the Secretary for consideration/approval withinfifteen (15) working days upon receipt thereof.

Upon approval of the application, the Secretary through theDirector/concerned Regional Director shall notify the Permit Holder tocause the registration of the same within fifteen (15) working days fromreceipt of the written notice. Registration is effected only upon paymentof the required fees (Annex 5-A). The Director/concerned RegionalDirector shall officially release the Permit to the Permit Holder afterregistration.

Failure of the Permit Holder to cause the registration of itsPermit within the prescribed period shall be a sufficient ground forcancellation of the same.

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Section 112. Rights and Obligations of the Mineral ProcessingPermit Holder

The Permit Holder, its heirs or successors-in-interest shall havethe right to conduct mineral processing, all other rights provided for inthe Act and these implementing rules and regulations; and the obligationto fully comply with the terms and conditions of the Permit.

Section 113. Terms and Conditions of a Mineral ProcessingPermit

a. The Permit shall be for the exclusive use andbenefit of the Permit Holder;

b. The Permit Holder shall assume fullresponsibility and be liable for damages toprivate and/or public property(ies) that may beoccasioned by its operations under the Permit;

c. The Permit Holder shall submit to theBureau/concerned Regional Office productionand activity reports prescribed in ChapterXXIX of these implementing rules andregulations. The Director/concerned RegionalDirector may conduct an on-site validation ofthe submitted reports: Provided, That thePermit Holder shall be charged verification andinspection fees thereof;

d. The Permit Holder shall effectively use the bestavailable appropriate anti-pollution technologyand facilities to protect the environment incompliance with the requirements of the ECCand P.D. No. 984. This should be undertakenin coordination with the EMB/DepartmentRegional Office;

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e. The Permit Holder shall conduct its operationsin accordance with the provisions of the Actand these implementing rules and regulations;

f. The Permit Holder shall not discriminate on thebasis of gender and that the Permit Holder shallrespect the right of women workers toparticipate in policy and decision-makingprocesses affecting their rights and benefits;

g. The Permit Holder shall pay fees, taxes andother obligations in accordance with existinglaws, rules and regulations;

h. The Permit Holder shall conform to laws, rulesand regulations regarding, among others, labor,safety and health standards;

i. The Permit Holder shall comply with itsobligations under its ECC;

j. The term of the Permit shall be for a period offive (5) years from date of issuance thereof,renewable for like periods but not to exceed atotal term of twenty-five (25) years: Provided,That no renewal of Permit shall be allowedunless the Permit Holder has complied with allthe terms and conditions of the Permit and hasnot been found guilty of violation of anyprovision of the Act and these implementingrules and regulations.

k. The Permit Holder shall give preference togoods and services produced and offered in thePhilippines of comparative quality and cost. Inparticular, the Contractor shall give preferenceto qualified Filipino construction enterprises,construction materials and skills available in thePhilippines, Filipino sub-contractors for road

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construction and transportation and Philippinehousehold equipment, furniture and food;

l. The Permit Holder shall give preference toFilipinos in all types of employment for whichthey are qualified and that the technology shallbe transferred to the same;

m. In case of foreign-owned/controlledcorporation, representations and warrantiesthat, except for payments for dispositions for itsequity, foreign investments in local enterpriseswhich are qualified for repatriation, and localsupplier's credits and such other generallyaccepted and permissible financial schemes forraising funds for valid business purposes, thePermit Holder shall not raise any form offinancing from domestic sources of funds,whether in Philippine or foreign currency, forconducting its mineral processing;

n. Alien employment shall be limited totechnologies requiring highly specialized trainingand experience subject to the required approvalunder existing laws, rules and regulations;

o. In every case where foreign technologies areutilized and where alien executives areemployed, an effective program of trainingunderstudies shall be undertaken;

p. The Permit Holder shall utilize the best availableappropriate and efficient mineral processingtechnology;

q. The Permit shall be subject to cancellation,revocation and termination as provided for inSection 115 hereof;

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r. Withdrawal by the Permit Holder from thePermit shall not release it from any and allfinancial, environmental, legal and/or fiscalobligations;

s. The Permit Holder shall comply with all otherapplicable provisions of the Act and theseimplementing rules and regulations; and

t. Such other terms and conditions notinconsistent with the Constitution, the Act andthese implementing rules and regulations, as wellas those which the Secretary may deem to befor the national interest and public welfare.

Section 114. Renewal of Mineral Processing Permit

Within thirty (30) calendar days before the expiration of thePermit, the Permit Holder may submit to the concerned Regional Officean application to renew the Permit accompanied by two (5) sets of thefollowing applicable mandatory requirements:

a. Justification of renewal;b. Comprehensive and validated technical report

on the outcome of the operations, including theirenvironmental effects duly prepared, signed andsealed by a licensed Mining Engineer orMetallurgical Engineer;

c. Audited report of expenditures incurred duringthe operations period;

d. Work Program duly prepared, signed andsealed by a licensed Metallurgical Engineer; and

e. Other supporting papers as the concernedRegional Office may require or the applicantmay submit.

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Any renewal shall be approved by the Secretary upon therecommendation of the Director/concerned Regional Director:Provided, That no renewal of Permit shall be allowed unless the PermitHolder has complied with all the terms and conditions of the Permit andhas not been found guilty of violation of any provision of the Act andthese implementing rules and regulations.

A Temporary Permit to Operate (TPO), which shall be valid forthirty (30) calendar days, shall be issued by the Director while awaitingthe approval of the renewal: Provided, That succeeding TPOs of sameduration shall be issued until the renewal is granted.

Section 115. Cancellation/Revocation/Termination of a MineralProcessing Permit

The Mineral Processing Permit may becanceled/revoked/terminated, after due process, by the Secretary uponthe recommendation of the Director/concerned Regional Director basedon the following grounds:

a. Failure to comply with the terms and conditionsof the Permit and ECC, if applicable;

b. Violation of any provision of the Act and theseimplementing rules and regulations;

c. Failure to pay the taxes and fees due theGovernment for two (2) consecutive years;

d. Any misrepresentation in any statement made inthe application or those made later in supportthereof; and

e. When national interest and public welfare sorequire or for environmental protection orecological reasons.

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The foregoing provisions notwithstanding, cancellation/revocation/termination of a Mineral Processing Permit shall not releasethe Permit Holder from any and all obligations it may have, particularlyregarding ecological management, to the public or private party(ies) atthe time of cancellation/revocation/termination.

CHAPTER XIITRANSPORT OF MINERALS/MINERAL PRODUCTSAND CONFISCATION, SEIZURE AND DISPOSITIONOF ILLEGALLY-SOURCED MINERALS/MINERAL

PRODUCTS

Section 116. Scope

Illegally-sourced minerals/mineral products are those which aremined, extracted, removed and/or disposed of without authority orpermit under existing mining laws, rules and regulations.

Section 117. Ore Transport PermitThe transport of all minerals/mineral products by Permit

Holders, Contractors, accredited traders, retailers, processors andother mining rights holders must be accompanied by an Ore TransportPermit (MGB Form No. 12-1) issued by the Regional Director orhis/her duly authorized representative: Provided, That the transport ofsand and gravel shall be covered by a Delivery Receipt.

In case of mineral ores or minerals being transported from thesmall-scale mining areas to the custom mills or processing plants, theconcerned Provincial/City Mining Regulatory Board shall formulate itsown policies to govern such transport of ores produced by small-scaleminers.

For MPSA and FTAA Contractors, Ore Transport Permitsshall be issued under the Agreements: Provided, That a written notice

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prior to shipment or transport of ores shall be furnished to theconcerned Regional Office for the purpose of monitoring miningactivities in the contract area: Provided, further, That such activity is inaccordance with the terms and conditions of the Agreement.

An Ore Transport Permit is not necessary for ore samples notexceeding two (2) metric tons to be used exclusively for assay and pilottest purposes. Instead, a certification regarding the same shall be issuedby the concerned Regional Director. For ore samples exceeding two(2) metric tons to be transported exclusively for assay and pilot testspurposes, an Ore Transport Permit shall be issued by the Director for alimited amount based on the type of ore, metallurgical tests to beundertaken and other justifiable reasons as determined by the Bureau.

Section 118. Basis of Arrests and Confiscations/Seizures

The absence of any of the foregoing documents shall beconsidered prima facie evidence of illegal mining and shall cause theconfiscation/seizure of the minerals/mineral products and the tools andequipment including conveyance used in the commission of the offensein favor of the Government pursuant to P.D. No. 1281, subject tofurther investigation. If it is found that the minerals/ mineral productsseized have been mined, extracted or removed without any permit orauthority under existing mining laws, rules and regulations, finalconfiscation can be effected to be followed by the filing of the complaintfor theft of minerals. The Bureau officers which include the RegionalDirector and other Bureau personnel, duly authorized by the Director,and CENRO personnel, duly authorized by the Secretary, shall haveauthority to arrest offenders and confiscate/seize illegally-sourcedminerals/mineral products and the tools, equipment and conveyanceused in the commission of offense.

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Section 119. Execution of Sworn Statements

Immediately after seizure of the minerals/mineral productstogether with the tools, equipment and conveyance used in thecommission of the offense, the apprehending Bureau officer shallexecute his/her sworn statement or affidavit surrounding the facts of thecase in the form hereto attached as MGB Form No. 12-2. He/Sheshall also take sworn statements or affidavits of witnesses, if any, in theform hereto attached as MGB Form No. 12-3.

Section 120. Assessment and Issuance of Confiscation/SeizureReceipt

The kind, volume or quantity of the seized minerals/mineralproducts shall be determined immediately and the assessment thereofshall be based on the gross volume or weight without benefit ofdeduction for natural defects, after which the corresponding seizurereceipt shall be issued by the signing Bureau officer, duly acknowledgedby the apprehended person(s) or party(ies). In case the apprehendedperson(s) or party(ies) refuse(s) to acknowledge the seizure receipt, theLocal Government authority may attest as to the veracity of said seizurereceipt.Section 121. Custody of the Confiscated/Seized Minerals/

Mineral Products, Tools, Equipment andConveyance

This shall be made in accordance with the following procedures:a. In case of apprehension by the Bureau field

officer, the mineral products, tools, equipmentand conveyance used shall be deposited withthe concerned Regional Office or wherever it ismost convenient, for safekeeping. If thetransfer of the seized products to the aforecitedoffices is not immediately feasible, the same

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shall be placed under the custody of any Theapprehending officer is authorized to seekassistance from licensed mine operators toprovide transportation facilities for the transferof the confiscated items from the place ofapprehension to the place of custody. licensedmine operator or the nearest local public officialsuch as the Barangay Captain, Municipal/CityMayor, Provincial Governor or the PhilippineNational Police (PNP), at the discretion of theconfiscating officer taking into account thesafety of the confiscated items. In any event,the custody shall be duly acknowledged andreceived by the official taking custody thereof:Provided, That in the case ofseizure/confiscation by the Bureau the case shallbe referred to the concerned Regional Officefor further investigation and disposition;

b. In case of apprehension by the PNP, EconomicIntelligence and Investigation Bureau (EIIB),Coast Guard and other Government lawenforcement agencies, the apprehending agencyshall notify the concerned Regional Office andturn over the seized items thereto forForconfiscated gold and/or other precious metal(s),the concerned Regional Office shall firstdetermine if they conform with the BangkoSentral ng Pilipinas (BSP) specifications orrequirements for acceptance. properinvestigation and disposition; and

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c. If the confiscated gold and/or other preciousmetal(s) satisfy(ies) the minimum weightrequirements but it does not conform with thephysical requirements, the said metal(s) shall bedelivered by the accountable officer escortedby security officers to the Bureau/concernedRegional Office Metallurgy Laboratory forprocessing. In cases where the weightrequirement is not satisfied, the ChiefCashier/Accountant of the concerned RegionalOffice shall store the confiscated metal(s) in asafety deposit box of the nearest reputablebanking institution duly accredited by theDepartment Regional Office. Once theinventory of metal(s) reaches the minimum BSPweight specifications, the ChiefCashier/Accountant shall turn over theconfiscated metal(s) to the Metallurgy Office.The latter shall turn over immediately afterprocessing into saleable form the metal(s) to theChief Cashier/Accountant. In each turnover,accountability is transferred through aMemorandum Receipt.

Section 122. Filing of Complaint

The concerned Regional Office shall file the complaint with theproper court for violation of Section 103 of the Act (Theft of Minerals).

The following documents should be attached to the complaint:

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a. Sworn statement of the apprehending/ arrestingofficer (MGB Form No. 12-2);

b. Affidavits of witnesses, if any (MGB Form No.12-3);

c. Copy of the seizure receipt;d. Photographs showing the minerals/mineral

products seized including the tools, equipmentand conveyance used in the commission of theoffense; and

e. Other supporting papers/evidences as the courtmay require.

Section 123. Referral of Complaint

Immediately after the complaint is filed, the Regional Office shalltransmit a copy of the complaint and all supporting documents to theBureau for proper handling and disposition, copy furnished theDepartment.

Section 124. Disposition of Confiscated/Seized Minerals/Mineral Products, Tools, Equipment andConveyance

The disposition of confiscated/seized minerals/mineral products,tools, equipment and conveyance shall be handled in accordance withthe following procedures:

a. The concerned Regional Director or his/herduly authorized representative shallexpeditiously sell at public auction and/ordispose in accordance with existing laws, rulesand regulations all confiscated/seizedminerals/mineral products except the following:

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1. Those subject of judicial proceedingswhere ownership of the minerals is atissue until proper authority is obtainedfor their disposition from the courtwhere the case is pending;

2. Those earmarked for donation to otherGovernment agencies; and

3. Those identified and determined by theDepartment for its own needs.

b. For confiscated gold and precious metals, thereshall be no bidding as the same shall be solddirectly to the BSP. The sale shall be made asfollows:

1. If confiscated metals conform withexisting BSP specifications, theconcerned Regional Office shallprepare a letter of intent or advice tosell confiscated precious metalsaddressed to the nearest BSP BuyingStation Director/Administrator; and

2. The Accountable Officer escorted bySecurity officers shall finally deliver saidmetals together with the letter/advice tothe BSP Buying Station and receivepayment therefor.

c. Confiscated minerals/mineral products exceptgold and other precious metals shall bedisposed of through a Committee on Bids andAwards on Confiscated Mineral Products

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(CBACMP) which, in all cases, shall becomposed of the Regional Director responsiblefor or having custody over the confiscatedminerals or his/her duly authorizedrepresentative as Chairman and LocalGovernment Unit (LGU), accreditedNongovernmental Organization (NGO) andCOA representatives as members.

d. Confiscated tools and equipment includingconveyance used shall be subject to forfeiture infavor of the Government and shall be disposedof, after due process, in accordance withpertinent laws, rules and regulations or policieson the matter.

In cases of confiscated minerals/mineral products that are thesubject of court cases, especially those that easily deteriorate likepumice and clay, representations with the proper court shall be madefor the immediate disposition thereof through public auction. Theproceeds of the sale shall be deposited as the court directs and thesame shall be awarded by the latter based on the final court decision.The procedures in handling the sale of confiscated minerals/mineralproducts through public auction are indicated in Annex 12-A.Section 125. Remittance of Proceeds of Sale

The proceeds of the sale of confiscated minerals/mineralproducts, after deducting all administrative costs related to theconfiscation of the minerals/mineral products and their disposition, shallbe remitted by the Chairman of the CBACMP to the Department eitherin the form of Cashier's or Manager's check immediately upon receiptof the full payment of the bidded mineral products.Section 126. Reportinga. Individual cases/report of confiscation/ seizure shall be

reported/sent immediately by the apprehending

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officer to the concerned Regional Directorwithin twenty-four (24) hours who in turn shallsend a report to the next higher officer. Adetailed report by the apprehending officer mustbe submitted within three (3) working daysfrom the date of seizure indicating actions takenthereon. If the confiscation/seizure is made withpersonnel from the Regional Office, the sameprocedure shall be followed by a report of theconcerned Regional Director to the Director.

b. Monthly Report

1. A Monthly Confiscation Report shall besubmitted by the concerned RegionalDirector together with the status of theconfiscated minerals/mineral products;and

2. The Director shall consolidate theMonthly Confiscation Reports of all theRegional Directors and in turn forwardthe same to the Secretary.

c. Quarterly ReportThe Director shall submit to the

Secretary a quarterly report of confiscatedminerals/mineral products.

CHAPTER XIIIACCREDITATION OF PROCESSORS, TRADERS,

DEALERS AND RETAILERS IN THE TRADING OFMINERALS/MINERAL PRODUCTS AND BY-PRODUCTS

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Section 127. Scope

This Chapter covers all minerals and ores including constructionmaterials such as raw sand, gravel, wash out pebbles and fillingmaterials, semiprocessed mineral products such as, but not limited torock, concrete aggregates, unpolished decorative stone (such asmarble, granite or limestone), tiles and slabs, metallic oreconcentrates/tailings, smelter slags, cathodes, ingots, billets, blooms,unrefined precious metals/bars/bullion and agricultural/industrial lime.Exempted are finished/manufactured minerals and metal products suchas cement, transit mixed concrete, ceramics, polished decorative stonetiles, refined or alloyed metal sheets, wires, bars, beams, plates, refinedprecious metal bars, jewelry or ornaments and other mineral products intheir final form or stage ready for consumption by end-users.

Section 128. General Provisions

No person shall engage in the trading of minerals/mineralproducts and by-products either locally or internationally, unlessregistered with the Department of Trade and Industry (DTI) andaccredited by the Department, with a copy of said registration andaccreditation submitted to the Bureau.

The traders, dealers and retailers of minerals/mineralproducts/by-products who are not Contractors/Permit Holders/miningright holders are henceforth required to be accredited by theDepartment.

Contractors/Permit Holders are considered to be registered andaccredited for the purpose of trading minerals/mineral products andby-products during the effectivity of their Permits or mining rights.

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Section 129. Mandatory Requirements for Accreditation

The application for Accreditation shall be filed by the applicantwith the concerned Regional Office: Provided, That an application shallbe accepted only upon payment of the required fees (Annex 5-A) to theconcerned Regional Office.

Upon payment of the filing and processing fees (Annex 5-A),the applicant shall submit at least five (5) sets of the followingmandatory requirements:

a. Duly accomplished application form as prescribed inMGB Form No. 13-1;

b. Copy of the Permit/Contract of the Suppliers/sources ofminerals/mineral products/by-products or copy ofCertificate of Accreditation in case the source ofmaterials is a trader, dealer or retailer;

c. DTI Registration;d. Proof of legal source or supply as supported by any of

the following documents:1. Supply Contract/Agreement with a Permit

Holder/Contractor/ accredited dealer producingthe specified minerals/mineralproducts/by-products;

2. Affidavit executed by a PermitHolder/Contractor/accredited dealer to theeffect that it is willing or currently selling and willcontinue to sell or supply the applicant with theminerals/mineral products/by-products specifiedin the application;

3. Delivery or Purchase Receipts issued by aPermit Holder, Contractor or previouslyaccredited dealer/trader; and

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4. Ore Transport Permit (OTP) or Bill of Ladingwhich clearly indicates that the applicant is theconsignee of a Permittee or a duly accrediteddealer/trader/shipper.

e. Other supporting papers as the concerned RegionalOffice may require or the applicant may submit.

Provided, That any application with incomplete mandatoryrequirements shall not be accepted.

Section 130. Procedure for Accreditation

The Regional Director who exercises territorial jurisdiction overapplicant's business operation shall issue the Certificate.

The following procedures shall be observed on processing ofapplication and issuance of the Certificate of Accreditation:

a. Upon receipt of the application and its supportingdocuments, the concerned Regional Director shallevaluate and validate them; and

b. Within fifteen (15) working days upon receipt thereof,he/she shall issue the Certificate or reject the applicationbased on merits or demerits, respectively.

The Regional Director shall regularly provide the Director with alist of accredited processors, traders, dealers and retailers ofminerals/mineral products and by-products filed in its jurisdiction.Section 131. Fees

Each applicant shall pay an application and filing fee (Annex5-A) to the concerned Regional Office.

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Section 132. Term of the Certificate of Accreditation

The Certificate of Accreditation (MGB Form No. 13-2) shallhave a term of two (2) years from its issuance, renewable for likeperiods.

Section 133. Confiscation, Apprehension and Disposition ofSeized Mineral Products

Shipments of minerals/mineral products and by-products bynon-accredited traders and other illegal sources shall be apprehended,confiscated and disposed of in accordance with the provisions ofChapter XII of these implementing rules and regulations.

CHAPTER XIVDEVELOPMENT OF MINING COMMUNITIES,

SCIENCES AND MINING TECHNOLOGY

Section 134. Development of Community and MiningTechnology and Geosciences

a. The Contractor/Permit Holder/Lessee shallassist in the development of the host andneighboring communities and mine camp topromote the general welfare of the inhabitantsliving therein;

b. The Contractor/Permit Holder/Lessee shallassist in developing mining technology andgeosciences as well as the correspondingmanpower training and development; and

c. The Contractor/Permit Holder/Lessee shall allotannually a minimum of one percent (1%) of thedirect mining and milling costs necessary toimplement Paragraphs (a) and (b) of this

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Section: Provided, That the royalty payment ofone percent (1%) of the gross output for theIndigenous Cultural Communities, pursuant toSection 16 hereof, may include theaforementioned allotment to implementParagraphs (a) and (b) hereof.

Section 135. Credited Activities or Expenditures

The following activities or expenditures shall be considered inenhancing the development of mining and neighboring communities:

a. Establishment and maintenance of communityschools, hospitals, churches and recreationalfacilities which will be open to the general publicwhether or not they are mine employees;

b. Construction and maintenance of communityaccess roads, bridges, piers and wharves;

c. Establishment and maintenance ofcommunication, waterworks, sewerage andelectric power systems which are accessible tomine employees and members of thecommunity;

d. Development and maintenance of communityhousing projects for mine employees andmembers of the community;

e. Establishment of training facilities for manpowerdevelopment for mine employees and membersof the community; and

f. Establishment of livelihood industries for thedependents of the mine employees as well asfor other members of the community.

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In addressing the future mine development, theContractor/Permit Holder/Lessee may involve the concernedcommunities, Local/National Government or concerned privateinstitutions in the pre-construction and social planning stage.

The following activities or expenditures shall be consideredtowards the development of mining, geosciences and processingtechnology and the corresponding manpower training and development:

a. Advanced studies conducted in the mining areasuch as, but not limited to, institutional andmanpower development and basic and appliedresearch;

b. Advanced studies, including the cost ofpublication thereof in referred technical journalsor monographs accessible to the local scientificcommunity, related to mining which areconducted by qualified researchers, asconstrued by the practices at the Department ofScience and Technology, who are notemployees of the mine;

c. Expenditures for scholars, fellows and traineeson mining, geoscience and processingtechnology and related subjects such ascommunity development and planning, mineraland environmental economics;

d. Expenditures on equipment and capital outlayas assistance for developing research andeducational institutions which serve as a venuefor developing mining, geoscience andprocessing technology and the correspondingmanpower training and development; and

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e. Other activities that the Director may considerupon proper recommendation by the concernedprofessional organizations and/or researchinstitutions, where appropriate.

Section 136. Development of Host and NeighboringCommunities

The Contractor/Permit Holder/Lessee shall perform thefollowing:

a. Coordinate with proper authorities in providingdevelopment plans for the host and neighboringcommunities;

b. Help create self-sustaining income generatingactivities, such as but not limited to,reforestation and production of goods andservices needed by the mine and thecommunity. Where traditional self-sustainingincome generating activities are identified to bepresent within the host and/or neighboringcommunities, the Contractor/Permit Holder/Lessee shall work with such communitiestowards the preservation and/or enhancementof such activities; and

c. Give preference to Filipino citizens, who haveestablished domicile in the host and neighboringcommunities, in the hiring of personnel for itsmining operations. If necessary skills andexpertise are currently not available, theContractor/Permit Holder/Lessee mustimmediately prepare and undertake a trainingand recruitment program at its expense.

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Section 137. Development of Mining Technology andGeosciences

The Contractor/Permit Holder/Lessee shall, amongothers, perform the following:

a. In the course of its operations, producegeological, geophysical, geochemical and othertypes of maps and reports that are appropriatein scale and which in format and substance areconsistent with the internationally acceptedstandards and practices. Such maps shall bemade available to the scientific community in themost convenient and cost effective forms,subject to the condition that theContractor/Permit Holder/Lessee may delayrelease of the said information for a reasonableperiod of time which shall not exceed three (3)years;

b. Systematically keep the data generated from thecontract/mining area such as cores, assays andother related information, including economicand financial, and may make them accessible tostudents, researchers and other personsresponsible for developing mining, geosciencesand processing technology subject to thecondition that the Contractor/PermitHolder/Lessee may delay release of data to thescience and technology community within areasonable period of time which shall notexceed three (3) years; and

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c. Replicate the data, maps and reports cited inParagraphs (a) and (b) and furnish the Bureaufor archiving and systematic safekeeping whichshall be made available to the science andtechnology community for conducting researchand for undertaking other activities whichcontribute to the development of mining,geosciences and processing technology and thecorresponding manpower training anddevelopment: Provided, That the release ofdata, maps and the like shall be similarlyconstrained in accordance with Paragraphs (a)and (b) above.

Section 138. Use of Indigenous Goods, Services andTechnologies

To the maximum extent compatible with efficient miningoperations, the Contractor/Permit Holder/Lessee shall give preferenceto products, services and technologies produced and offered in thePhilippines of comparable quality. In particular, the Contractor/PermitHolder/Lessee shall give preference to Filipino construction enterprises,construct buildings utilizing materials and skills available in thePhilippines, employ Filipino subcontractors for road construction andtransportation, and purchase Philippine household equipment, furnitureand food.

Section 139. Donations/Transfer of FacilitiesThe Contractor/Permit Holder/Lessee shall, within one (1) year

from the abandonment, cancellation or termination of theAgreement/Permit/Lease, remove all improvements deemed no longersocially usable after consultation with concerned Local GovernmentUnit(s)/community(ies), on the mining premises found on public land(s).

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Otherwise, all the social infrastructure and facilities shall be turned overor donated tax-free to the proper Government authorities, national orlocal, to ensure that said infrastructure and facilities are continuouslymaintained and utilized by the host and neighboring communities.

Section 140. Hiring of Foreigners for Technical and SpecializedWork During Mining Operations

All holders or applicants for Mineral Agreement/FTAA/Exploration Permit/Mineral Processing Permit shall givepreference to Filipino citizens in all types of mining employment withinthe country insofar as such citizens are qualified to perform thecorresponding work with reasonable efficiency and without hazard tothe safety of the operations. They, however, shall not be hindered fromhiring employees of his own selection, subject to the provisions ofCommonwealth Act No. 613, as amended, for technical andspecialized work which, in his judgment and with the approval of theDirector, requires highly-specialized training or experience inexploration, development or utilization of mineral resources: Provided,That in no case shall each employment exceed five (5) years or thepayback period of the project as stated in the approved originalfeasibility study, whichever is longer: Provided, further, That eachforeigner employed as mine manager, vice president for operations or inan equivalent managerial position in charge of mining, milling, quarryingor drilling operations shall be subject to the provision of Section 141hereof: Provided, finally, That each foreigner employed in a positionlower than the managerial level shall be hired on a consultancy basis.

Section 141. Requirements for the Employment of Foreignersin Mining Operations

Foreigners that may be employed in mining operations shall:

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a. Present evidence of his/her qualifications andwork experience related to his/her position; or

b. Pass the appropriate Government licensureexamination; or

c. In special cases, may be permitted to work bythe Director for a period not exceeding one (1)year: Provided, That if reciprocal privileges areextended to Filipino nationals in the country ofdomicile, the Director may grant waivers orexemptions;

d. Secure working permits/visa from otherconcerned Government agency(ies); and

e. Submit other supporting papers deemednecessary by the Secretary/Director/ concernedRegional Director.

CHAPTER XVMINE SAFETY AND HEALTH

Section 142. Responsibilities of a Contractor/Permittee/Lessee/Permit Holder and Service Contractor

All Contractors, Permittees, Lessees, Permit Holders andService Contractors shall strictly comply with all the rules andregulations embodied under Mines Administrative Order (MAO) No.MRD-51, Series of 1991, otherwise known as the "Mine Safety Rulesand Regulations."

For new technologies/equipment in mining and millingoperations that are not covered under the provisions of MAO No.MRD-51, the Bureau shall formulate the appropriate rules andregulations to govern the same after due consultation with all concernedparties.

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Section 143. Accreditation of Service Contractors

No Service Contractor shall be hired by theContractor/Permittee/Lessee/Permit Holder to undertake mining/quarrying operations unless they are duly accredited by the Bureau.

The following are the requirements for accreditation:

a. Duly certified Certificate of Registration issuedby the Securities and Exchange Commission orconcerned authorized Government agency;

b. Duly certified Articles of Incorporation and By-Laws;

c. Proof of technical competence including, amongothers, curricula vitae and track records inmining operations and environmentalmanagement of the technical personnel whoshall undertake the said activities;

d. Track record of the technical personnel inundertaking safe mining/quarrying operationsand related activities;

e. Proof of financial capability to undertake miningand quarrying operations and related activities,such as latest Audited Financial Statement andwhere applicable, Annual Report for thepreceding year, credit lines, bank guaranteesand/or similar negotiable instruments; and

f. Other supporting papers as the Department/Bureau/concerned Regional Office may requireor the applicant may submit.

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Section 144. Submission of Safety and Health Program

The Director shall require a Contractor/Permittee/Lessee/Permit Holder/Service Contractor to submit a Safety and HealthProgram covering its area of operations within fifteen (15) working daysbefore the start of every calendar year, copy furnished the RegionalOffice, with the following terms and conditions:

a. The safety and health program shall include, butshall not be limited to, the following:

1. Standard operating procedures formining and milling operations;

2. Management and employee training;3. Good housekeeping;4. Health control and services;5. Provisions for personnel protective

equipment, etc;6. Monitoring and reporting;7. Environmental Risk Management

including an Emergency ResponseProgram; and

8. Occupational Health and SafetyManagement.

b. For the entire duration of the contract period,the Contractor/Permittee/Lessee/Permit Holdershall be responsible in the monitoring of thesafety and health program of the ServiceContractor: Provided, That the former shallensure the compliance of the latter with existingrules and regulations: Provided, further, Thatthe safety records of the Service Contractor

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shall be included in a separate form in the safetyrecord of the Contractor/ Permittee/ Lessee/Permit Holder.

c. A Service Contractor shall be required toassign a safety engineer and/or safety inspectorif the service area requires close supervisionwhere imminent hazards exist.

Section 145. Mine/Quarry Safety Inspection and Audit

The Regional Director or his/her duly authorized representativeshall have exclusive jurisdiction over the conduct of safety inspection ofall installations, surface or underground, in mining/quarrying operationsand monitoring of the safety and health program in a manner that will notimpede or obstruct work in progress of a Contractor/ Permittee/Lessee/ Permit Holder and shall submit to the Director a quarterlyreport on their inspection and/or monitoring activities: Provided, Thatthe Director shall undertake safety audit annually or as may benecessary to assess the effectiveness of the safety and health program.

Section 146. Registration of Safety Engineer and SafetyInspector

All Safety Engineers and Safety Inspectors of mining/quarryingoperations shall be duly registered with the Regional Office and thecorresponding permit shall be issued for this purpose (MGB Form Nos.15-1, 15-2 and 15-3).

Section 147. Qualifications for Registration as Safety Engineeror Safety Inspector

a. For Registration as Safety Engineer:

1. For Permanent Registration -

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i. A duly registered and currentlylicensed Mining Engineer withat least one (1) yearsupervisory experience inmining/quarrying operationsand/or mine safety work; or

ii. A duly registered and currentlylicensed Engineer, Geologist orChemist with at least five (5)years experience in mining/quarrying operations and/ormine safety work.

2. For Temporary Registration -

Any duly registered andcurrently licensed Engineer, Geologistor Chemist with at least two (2) yearsexperience as Safety Inspectorpreferably in the employ of thecompany.

b. For Registration as Safety Inspector:

1. For Permanent Registration -

i. A graduate in any Engineering,Geology or Chemistry coursewith at least one (1) yearexperience in safety work ortwo (2) years experience inmining operations; or

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ii. A college undergraduate in anyEngineering, Geology orChemistry course with at leasttwo (2) years experience insafety work or three (3) yearsexperience in mining operations;or

iii. At least high school graduatewith four (4) years experiencein safety work or five (5) yearsexperience in mining operations.

2. For Temporary Registration as Safety Inspector -

i. A graduate in any Engineering,Geology or Chemistry coursewith one (1) year experience inmining operation; or

ii. A college graduate in anyEngineering, Geology orChemistry course with at leastone (1) year experience insafety work or two (2) yearsexperience in mining operation;or

iii. At least high school graduatewith two (2) years experiencein safety work or three (3)years experience in miningoperation.

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Section 148. Mandatory Requirements for the Issuance ofSafety Engineer/Inspector Permit

Three (3) copies of the following requirements shall besubmitted before the issuance of Safety Engineer/Inspector Permit:

a. Duly filled-up application form;b. Certified photocopy of college diploma or high

school diploma, or pertinent credentials, as thecase may be;

c. Certificate of employment (present andprevious), signed under oath;

d. Latest photograph, 2 in. x 2 in.; ande. Registration fees in the amount specified under

Annex 5-A.

Section 149. Term of Temporary Safety Engineer/InspectorPermit

A Temporary Safety Engineer/Inspector Permit shall have aterm of one (1) year from the date of issuance thereof, renewable everyyear.

Section 150. Permit for Electrical/Mechanical Installations

No electrical and/or mechanical installation shall be undertakeninside a mining/quarrying operation compound without a permit issuedfor the purpose by the concerned Regional Director.

Section 151. Applications and Plans for Electrical/MechanicalInstallations

a. Application for such installation shall be filed bythe Contractor/Permit Holder or his/herauthorized representative with the concerned

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Regional Office accompanied by plans andspecifications;

b. Plans shall be prepared in accordance with theprovisions of Electrical Engineering Law withrespect to electrical installation and MechanicalEngineering Law with respect to mechanicalinstallation, and such plans must conform to therules and regulations which have been or maybe formulated in pursuance of the above-mentioned laws;

c. Application for alteration and/or addition of anyelectrical or mechanical installations shall befiled in the same manner as for a newinstallation; and

d. Authority to install shall be issued only after theplans have been cleared and certified toconform with the rules and regulations of theabove-mentioned laws.

Section 152. Conditions of an Electrical/MechanicalInstallations Permit

a. Upon completion of installation but prior toregular operation, an inspection shall beconducted by the concerned Regional Directoror his/her duly authorized representative;

b. If upon inspection by the engineers of theconcerned Regional Office, the installation isfound to be in accordance with the plans andspecifications, a written permit good for aperiod of one (1) year shall be issued; and

c. Application for renewal of anElectrical/Mechanical Permit shall be filed bythe Contractor/Permit Holder or his/her

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authorized representative with the concernedRegional Office at least thirty (30) calendardays before the expiration date of said Permit.

Section 153. Charges

The applicant shall bear all expenses in the field inspectionincluding the cost of transportation of the field inspectors from theirofficial station to the mine/quarry and back. In addition, an inspectionfee of One Thousand Pesos (P=1,000.00) per man per day shall becharged to the applicant: Provided, That the minimum charge shall notbe less than Five Thousand Pesos (P=5,000.00).

Section 154. Power to Issue Orders

a. As the need arises, the concerned RegionalDirector shall require the Contractor/Permittee/Lessee/Permit Holder and ServiceContractor to remedy any practice connectedwith mining or quarrying operations, which isnot in accordance with the provisions of MAONo. MRD-51; and

b. The same may summarily suspend, wholly orpartially, any activity related to mining/quarryingoperations, in case of imminent danger to life orproperty, until the danger is removed, or untilappropriate measures are taken by theContractor/ Permittee/Lessee/PermitHolder/Service Contractor.

Section 155. Report of Accidentsa. In case of any incident or accident, causing or

creating the danger of loss of life or serious

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physical injuries, the person in charge of theoperations shall report the same to theconcerned Regional Office where theoperations are situated within twenty-four (24)hours, copy furnished the Bureau. Failureto report the same without justifiable reasonshall be cause for the imposition ofadministrative sanctions prescribed under MAONo. MRD-51; and

b. The Contractor/Permittee/Lessee/PermitHolder/Service Contractor shall furnish theBureau/concerned Regional Office with thefollowing:

1. Monthly Contractor's/Permittee's/Lessee's/Permit Holder's/ServiceContractor's Report of Accident orSickness (MGB Form No. 15-4);

2. Monthly General Accident Report(MGB Form No. 15-5); and

3. Minutes of the Central SafetyCommittee meetings.

Section 156. Right to Possess and Use Explosives

A Contractor/Permittee/Lessee/Permit Holder/ServiceContractor shall have the right to possess and use explosives within itscontract/permit/lease area as may be necessary for its mining/quarryingoperations upon approval of an application by the Philippine NationalPolice through the recommendation by the concerned Regional Office.

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Section 157. Requirements in the Application for Purchaser'sLicense, License to Purchase/Transfer Explosivesor Blaster Foreman's License for Mining/Quarrying Purposes

No application for Purchaser's License, License toPurchase/Transfer Explosives or Blaster Foreman's License formining/quarrying purposes (MGB Form No. 15-6) shall be acceptedfor filing with the Regional Office unless accompanied by aprocessing/application fee in accordance with the schedule in Annex 5-A and accompanied by four (4) copies of supporting documentsprescribed in Annex 15-A.

Section 158. Field Inspection of Proposed Storage Facilities(Magazines) and Verification of Blasting Scheme

Immediately after the filing of application for Purchaser'sLicense, the concerned Regional Director shall authorize the conduct offield inspection of storage facilities to determine whether or not thelocation and specifications of magazines are in accordance with thoseprescribed under MAO No. MRD-51 and to verify the proposedblasting scheme(s). The applicant shall bear all expenses in the fieldverification and the cost of transportation of the field investigators fromtheir Official Station to the mine/quarry site and return.

Section 159. Approval of the Applications for Purchaser'sLicense, License to Purchase/Transfer Explosivesor Blaster Foreman's License for Mining/Quarrying Purposes

Upon satisfaction of all the requirements stated in Section 157hereof, the application for Purchaser's License, License toPurchase/Transfer Explosives or Blaster Foreman's License for

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mining/quarrying purposes shall be endorsed by the concerned RegionalOffice to the Philippine National Police for consideration/approval.

Section 160. Filing of Application for Amendment and Renewalof Purchaser's License

Application for amendment of Purchaser's License shall be filedand acted upon in the same manner as for a new Purchaser's License.

Application for renewal of Purchaser's License shall be filed bythe holder with the concerned Regional Office at least thirty (30)calendar days before the expiration date of such License.

Section 161. Right of Inspection

The Director reserves the right to inspect the mine/quarryexplosives magazines and audit records of explosive transactions at theexpense of the Purchaser's License holder and at specified rates as maybe deemed necessary: Provided, That failure to immediately implement,without justifiable reasons, the recommendation(s) to ensure the propersafekeeping and maintenance of explosives and its magazines shallcause for the imposition of administrative sanctions as provided for inMAO No. MRD-51.

Section 162. Submission of Reports by Purchaser's LicenseHolders

Holders of Purchaser's Licenses shall be required to keeprecords of daily explosive transactions and submit to the Directorreports of their explosive transactions (MGB Form No. 15-7) andexplosives and accessories consumption reports (MGB Form No. 15-8) within fifteen (15) working days after every calendar month.

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Section 163. Mine Labor

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

The Bureau shall coordinate with the Department of Labor andEmployment in the determination of hazardous operations, processesand/or activities in mining industry in relation to the employment ofminors.

Section 164. Mine Supervision

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

Section 165. Coverage of the Magna Carta for Public HealthWorkers

All personnel of the Bureau, its Regional Offices and otherDepartment Bureaus/Offices, particularly the EnvironmentalManagement Bureau, involved in the actual implementation of minessafety, health and environmental laws, rules and regulations shall becovered and entitled to the allowances and other benefits under R.A.No. 7305, otherwise known as the "Magna Carta of the Public HealthWorkers". As such, funding for this purpose shall be automaticallyincluded in the regular budget of the Bureau/Department.

CHAPTER XVIENVIRONMENTAL PROTECTION

Section 166. General Provision

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Consistent with the basic policy of the State to assure theavailability, sustainability and equitable distribution of the country'snatural resources, the Department adopts the policy that miningactivities attendant to permits, agreements and leases shall be managedin a technically, financially, socially, culturally and environmentallyresponsible manner to promote the general welfare of the country andthe sustainable development objectives and responsibilities as providedfor in these implementing rules and regulations.

Section 167. Environmental Protection Objectives

The environmental protection objectives include the following:

a. Maintenance of sustainable environmentalconditions at every stage of the miningoperation;

During every stage of the miningoperation, as well as after the termination stagethereof, all open pit work areas, undergroundworkplaces, mine waste and tailingsimpoundment systems, quarry sites and othermining-disturbed landforms, including thosedisturbed during exploration, shall beprogressively rehabilitated to a conditionprescribed in the Environmental ComplianceCertificate and/or Environmental Protection andEnhancement Program.

b. Establishment of a functional post-disturbanceland use capability;

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Minesite decommissioning andrehabilitation shall aim to establish a land usecapability that is functional and proximate to theland use prior to the disturbance of the minearea, unless other more beneficial land uses arepredetermined and agreed in partnership withlocal communities and Local Government Units.

c. Preservation of downstream freshwater quality;

The quality of surface and ground wateremanating from the exploration orcontract/lease areas shall be maintained atacceptable levels, as determined from the actualand/or potential downstream water uses.

d. Preservation of sea water quality and naturalhabitats for marine life;

e. Prevention of air and noise pollution; andf. Respect for the traditional and/or sustainable

management strategies concerning naturalresources of Indigenous Cultural Communitiesand other communities.

Section 168. Environmental Work Program (EWP)

Applicants for Exploration Permits, as well as those for MineralAgreements and FTAAs which shall undertake exploration activities,shall submit to the Bureau for areas within Mineral Reservations or tothe concerned Regional Office(s) for areas outside MineralReservations an EWP (MGB Form No. 16-1 or MGB Form No. 16-1A) detailing the environmental impact control and rehabilitationactivities proposed during the exploration period including the costs to

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enable sufficient financial resources to be allocated to meet theenvironmental and rehabilitation commitments.

The EWP shall provide a description of the expected andconsidered acceptable impacts and shall set out the environmentalprotection and enhancement strategies based on best practice inenvironmental management in mineral exploration. It shall include astatement on post-exploration land use potential for various types ofdisturbed land and extend to the completion of the commitments in therehabilitation of the disturbed land in a technically, socially andenvironmentally competent manner. The program shall be based onacceptable, practical and achievable options and demonstratedpractice. Finally, the program shall include implementation schedules,system of environmental compliance guarantees, monitoring, reportingand cost provisions. Where proposed practices are unproven, aresearch program to prove the impact control and rehabilitationtechnology shall be required.

The applicants shall furnish the concerned SangguniangPanlalawigan with the said EWP. A status report as to compliancewith the EWP shall be submitted to the Bureau/concerned RegionalOffice within fifteen (15) working days from the end of six (6) monthsafter the approval of the EWP and every six (6) months thereafter.

Detailed guidelines in the preparation of and on compliance withthe EWP shall be prescribed by the Secretary through the Director andshall be intended to assist the development of project specificenvironmental management practices.Section 169. Environmental Protection and Enhancement

Program (EPEP)

An EPEP (MGB Form No. 16-2) shall be required to providethe operational link between the environmental protection and

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enhancement commitments under these implementing rules andregulations, as well as those stipulated in the Environmental ComplianceCertificate (ECC) under P.D. 1586 and the Contractor's plan of miningoperation: Provided, That submission of the EPEP shall complementand not substitute for the requirement for an Environmental ComplianceCertificate.

EPEPs are required in the following cases:a. Mineral Agreement or FTAA Contractors and

other Permit Holders shall submit, within thirty(30) calendar days upon receipt of the ECC, anEPEP covering all areas to be affected bymining development, utilization and processingunder their contracts. Environmental impactcontrol and rehabilitation activities proposedduring the life-of-mine shall include costings toenable sufficient financial resources to beallocated to meet the life-of-mine commitments.Such financial requirements of the EPEP shallbe the basis for the lodging of the MineRehabilitation Fund; and

b. Existing MPSA or FTAA Contractors withECCs and operating mines and quarries maysubmit, within sixty (60) calendar days from theeffectivity of these implementing rules andregulations, an EPEP covering all areas to beaffected by development, utilization andprocessing under their contract and/or lease.Environmental impact control and rehabilitationactivities proposed during the remaininglife-of-mine period shall include costings toenable sufficient financial resources to beallocated to meet the environmental and

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rehabilitation commitments. Such financialrequirements of the EPEP shall be the basis forthe lodging of the Mine Rehabilitation Fund.

The EPEP shall provide a description of the expected andconsidered acceptable impacts and shall set out the life-of-mineenvironmental protection and enhancement strategies based on bestpractice in environmental management in mining. It shall include astatement on post-mining land use potential for various types ofdisturbed land (inter alia, pits, waste dumps, tailings-impoundingstructures and infrastructure sites) and extend to the completion of thecommitments in the rehabilitation of the disturbed land in a technically,socially and environmentally competent manner. The program shall bebased on practical and achievable options and demonstrated practice.Finally, the program shall include implementation schedules, system ofenvironmental compliance guarantees, monitoring, reporting and costprovisions. Where proposed practices are unproven, a researchprogram to prove the impact control and rehabilitation technology shallbe required.

The Contractor shall allocate for its initial environment-relatedcapital expenditures an amount that shall approximate ten percent(10%) of the total capital/project cost or such other amount dependingon the environmental/geological condition, nature and scale ofoperations and technology employed. Initial environment-related capitalexpenditures may include environmental studies and design cost, wastearea preparation, tailings/slime containment/disposal system, mine wastedisposal system, wastewater/acid mine drainage treatment plants, dustcontrol equipment, air pollution control facilities, drainage system andother environment-related mitigating measures and capital expenditures.

Detailed guidelines in the preparation of and on compliance withthe EPEP shall be prescribed by the Secretary through the Director and

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shall be intended to assist the development of project specificenvironmental management practices.

Section 170. Processing and Approval of the EPEP

The Contractor/Permit Holder shall submit at least ten (10)legible copies of the EPEP and a complete electronic file in computerdiskettes to the Mine Rehabilitation Fund (MRF) Committee (describedin Sections 182 and 183 hereof) through the concerned Regional Officefor review.

The MRF Committee shall conduct a preliminary evaluation onthe submitted document as to its form and substance and may imposeadditional requirements and documentation which are deemednecessary. The MRF Committee shall endeavor to complete theevaluation and processing of the EPEP within thirty (30) calendar daysfrom receipt thereof.

All preliminary evaluations shall be consolidated and forwardedto the Contingent Liability and Rehabilitation Fund (CLRF) SteeringCommittee (described in Sections 193 and 194 hereof) through theBureau for final evaluation and approval. The EPEP shall be actedupon by the CLRF Steering Committee within thirty (30) calendar daysfrom receipt thereof from the MRF Committee. The Contractor/PermitHolder shall provide each of the concerned Local Government Unitswith a copy of the approved EPEP not later than thirty (30) calendardays prior to the intended date of commencement of mining operation.

Any change in the approved environmental protection,enhancement and rehabilitation strategies, which entails a variance ofminus twenty percent (-20%) of the financial requirements, shall requirea submission of a revised EPEP by the Contractor/Permit Holder to theMRF Committee for preliminary evaluation and to the CLRF SteeringCommittee for final evaluation and approval. The MRF and CLRF

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Steering Committees shall act on the revised EPEP within the period ofassessment as set forth in the preceding paragraphs. TheContractor/Permit Holder shall provide each of the concerned LocalGovernment Units with a copy of the approved revised EPEP not laterthan thirty (30) calendar days prior to the intended date of effecting therevised EPEP.

Section 171. Annual Environmental Protection andEnhancement Program (AEPEP)

To effectively implement the approved EPEP, an AnnualEnvironmental Protection and Enhancement Program (MGB Form No.16-3) shall be submitted to the Bureau/concerned Regional Office atleast thirty (30) calendar days prior to the beginning of every calendaryear. Such program shall be based on the approved EPEP and shall beimplemented during the year for which it shall be submitted. It shallinclude, but shall not be limited to, exploration, development, utilization,rehabilitation, regeneration, revegetation and reforestation of mineralizedareas, slope stabilization of mined-out areas, waste dumps (acid minedrainage control), tailings-covered areas, aquaculture, watersheddevelopment and water conservation and socioeconomic development.

A Contractor/Permit Holder shall allocate for its annualenvironment-related expense a percentage based on the AEPEP whichmay approximate a minimum of three to five percent (3-5%) of its directmining and milling costs depending on the environment/geologiccondition, nature and scale of operations and technology employed.

Section 172. Penalties

Contractors/Permit Holders found operating a mining projectwithout an approved EPEP/revised EPEP shall suffer the penaltyprescribed in the Penal Provisions of the Act.

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Section 173. Organization of a Mine Environmental Protectionand Enhancement Office (MEPEO)

All Contractors/Permit Holders shall incorporate in their mineorganization structures a "Mine Environmental Protection andEnhancement Office (MEPEO), which shall set the level of prioritiesand marshal the resources needed to implement environmentalmanagement programs. The MEPEO shall be headed preferably byeither a licensed Mining Engineer, Geologist or Metallurgical Engineeror by an Environmental Engineer with at least five (5) years experiencein actual mining environment work and shall be responsible foraddressing the environmental concerns of the Contractor/Permit Holderthrough adequate and sustainable programs.

Section 174. Environmental Monitoring and Audit

To ensure and check performance of and compliance with theapproved EPEP/AEPEP by the Contractors/Permit Holders, aMultipartite Monitoring Team (MMT), as described in Section 185hereof, shall monitor every quarter, or more frequently as may bedeemed necessary, the activities stipulated in the EPEP/AEPEP. Theexpenses for such monitoring shall be chargeable against the MonitoringTrust Fund of the Mine Rehabilitation Fund as provided for in Section181 hereof. The environmental monitoring reports shall be submitted bythe MMT to the MRF Committee and shall serve as part of the agendaduring its meetings as mentioned in Section 184 hereof. Said reportsshall also be submitted to the CLRF Steering Committee to serve asone of the bases for the annual environmental audit it shall conduct.

An independent environmental audit shall be undertakenregularly by the Contractor to identify environmental risks affectingmining operations to serve as a basis for the development of an effectiveenvironmental management system. The MMT, MRF Committee and

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CLRF Steering Committee shall be furnished with the results of the saidaudit.

Section 175. Power to Issue Order

The Regional Director in consultation with the EnvironmentalManagement Bureau (EMB) and/or Environmental Management andProtected Areas Services (EMPAS) of the Department Regional Officeshall require the Contractor/Permittee/Lessee/Permit Holder to remedyany practice connected with mining or quarrying operations which is notin accordance with anti-pollution laws and regulations. The RegionalDirector may summarily suspend mining or quarrying operations in caseof imminent danger to the environment, until the danger is removed orappropriate measures are taken by theContractor/Permittee/Lessee/Permit Holder.

In situations where mining or quarrying operations are actuallyendangering the environment or pose imminent danger thereto, theEMB, Pollution Adjudication Board (PAB) or EMPAS may take theremedial measures it may deem imperative to avert such danger andimmediately submit a report thereon to the Director/concerned RegionalDirector for appropriate action.

Section 176. Presidential Mineral Industry EnvironmentalAwards

A Presidential Mineral Industry Environmental Awards may begiven to exploration or operating mining companies based on theiryearly environmental performance and accomplishments. Detailedguidelines in the determination of the recipients of the PresidentialMineral Industry Environmental Awards shall be formulated by theSecretary through the Director.

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CHAPTER XVIIENVIRONMENTAL IMPACT ASSESSMENT (EIA)

Section 177. Processing of the Environmental ImpactStatement (EIS) and the Initial EnvironmentalExamination (IEE)

The Environmental Management Bureau (EMB)/DepartmentRegional Office, in coordination with the Bureau, shall take primaryresponsibility for the acceptance, processing, evaluation and monitoringof the Environmental Impact Statements (EISs) and InitialEnvironmental Examinations (IEEs). The EMB/EMPAS shall have theauthority to recommend to the Secretary/Regional Executive Director(RED) any appropriate action on applications for an EnvironmentalCompliance Certificate (ECC).

Section 178. EPEP in Relation to ECC

The preparation, submission and approval of EPEP shall beincorporated as a mandatory conditionality in the ECC being issued bythe Secretary/RED or their duly authorized representatives to aContractor/Permit Holder. The ECC shall be the basis in thepreparation of EPEP.

The Bureau and the EMB shall enter into a Memorandum ofUnderstanding to harmonize the promulgation of these implementingrules and regulations and the EIS system.Section 179. Penalties

Contractors/Permit Holders found operating a mining projectwithout an ECC or wilfully violating and grossly neglecting to abide bythe terms and conditions of the ECC shall suffer the penalty prescribedin the Penal Provisions of the Act and other pertinent environmentallaws.

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CHAPTER XVIIICONTINGENT LIABILITY AND REHABILITATION FUND

Section 180. Contingent Liability and Rehabilitation Fund

Cognizant of the need to ensure just and timely compensationfor damages and progressive and sustainable rehabilitation for anyadverse effect a mining operation or activity may cause, the Departmentthrough the Bureau shall institutionalize an environmental guarantee fundmechanism to be known collectively as the Contingent Liability andRehabilitation Fund (CLRF).

The CLRF shall be in the form of the Mine Rehabilitation Fundand the Mine Waste and Tailings Fees as stipulated in the Act and shallbe administered by the CLRF Steering Committee as provided for inSection 193 hereof.

Section 181. Mine Rehabilitation Fund

A Mine Rehabilitation Fund (MRF) shall be established andmaintained by each operating Contractor/Permit Holder as a reasonableenvironmental deposit to ensure availability of funds for the satisfactorycompliance with the commitments and performance of the activitiesstipulated in the EPEP/AEPEP during specific project phase. The MRFshall be deposited as a Trust Fund in a Government depository bankand shall be used for physical and social rehabilitation of areas andcommunities affected by mining activities and for research on the social,technical and preventive aspects of rehabilitation.

The MRF shall be in two forms, namely:

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a. Monitoring Trust Fund (MTF). This Fund shallbe initiated by the Contractor/Permit Holderand shall be deposited in a mutually acceptableGovernment depository bank for the exclusiveuse in the monitoring program approved by theMRF Committee

The MTF shall be in cash and in anamount to be determined by the MRFCommittee which shall not be less than theamount of Fifty Thousand Pesos (P=50,000.00)to cover maintenance and other operatingbudget for the transportation and travelexpenses, cost of laboratory analysis, cost ofsupplies and materials, cost of communicationservices, cost of consultancy work and otherreasonable expenses incurred by the monitoringteam: Provided, That the Secretary shall beauthorized to increase the said amount whennational interest and public welfare so require,upon the recommendation of the Director. TheContractor/Permit Holder shall notify the Chairor the Co-Chair of the MRF Committee of itscompliance with the deposit requirementthrough a certification from the bank.

Authorization for the disbursement fromthe MTF shall only be given by the designatedrepresentatives of both the MRF Committeeand the Contractor/Permit Holder.Replenishment of this amount shall be donemonthly to correspond to the expenses incurredby the monitoring team for the month.

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b. Rehabilitation Cash Fund. The Contractor/Permit Holder shall set up a Rehabilitation CashFund (RCF) for a designated amount to ensurecompliance with the approved rehabilitationactivities and schedules for specific miningproject phase, including research programs asdefined in the EPEP/AEPEP. The RCF shallbe equivalent to ten percent (10%) of the totalamount needed to implement the EPEP or FiveMillion Pesos (P=5,000,000.00), whichever islower. The RCF shall be deposited as a TrustFund in a mutually agreed Governmentdepository bank: Provided, That said amountshall be deposited in four (4) equal quarterlydeposits within fifteen (15) calendar days fromthe beginning of each quarter of the first yearfollowing the approval of the EPEP.

A request for withdrawal anddisbursement from said amount(s) by theContractor/Permit Holder shall be based on itsEPEP/AEPEP and shall be submitted to theMRF Committee for consideration andapproval, copy furnished the CLRF SteeringCommittee.

In the event of withdrawals from theRCF, the Contractor shall annually replenish theRCF so as to maintain the minimum requiredamount thereof.

For the succeeding years up to the end of the post-decommissioning period of ten (10) years, the MRF shallcontinue as a Trust Fund as earlier described. Any interests or

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earnings of the MRF shall be made part thereof to compriseand satisfy the above-mentioned amount required. TheContractor/Permit Holder shall notify the Chair or the Co-Chairof the MRF Committee of its compliance with the depositrequirement through a certification from the bank.

Section 182. The Mine Rehabilitation Fund Committee

A Mine Rehabilitation Fund (MRF) Committee shall be createdin each Region where active mining operations exist and shall have thefollowing duties and responsibilities:

a. Conducts preliminary evaluation on thesubmitted EPEP and consults with credibleexperts, as may be required, to clarifyproposals and to discuss the adequacy ofcontrol and rehabilitation measures;

b. Manages, operates, monitors and looks afterthe safety of the MRFs that shall be establishedand deposited in a Government depositorybank in accordance with the provisions of theseimplementing rules and regulations;

c. Resolves issues involving the progressive minerehabilitation programs that shall beimplemented;

d. Hires credible experts to do independentstudies and researches on the environmental,engineering and sociocultural impacts of theprojects in order to assist it in making judiciousdecisions;

e. Ensures that the approved EPEPs/AEPEPsshall be strictly implemented by theContractors/Permit Holders;

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f. Deputizes a Multipartite Monitoring Team(MMT) to serve as its monitoring arm with theconcerned Regional Office taking the lead role;

g. Monitors and evaluates the performance of theMMTs and reports its assessments to theCLRF Steering Committee;

h. Ensures that the MTFs and RCFs shall be keptseparate and distinct from one another andmaintains independent and specific books ofrecords for all transactions of the said funds ofeach Contractor/Permit Holder;

i. In the absence of fraud, bad faith or grossnegligence on the part of the MRF Committeeor any person acting on its behalf, the saidCommittee shall not be liable for any loss orimpairment of the MRFs arising out or inconnection with any act done or performed orcaused to be done or performed by the saidCommittee pursuant to the provisions of theseimplementing rules and regulations;

j. Prepares and submits to the Secretary/Director, within thirty (30) calendar days afterthe end of each year, an annual report ofaccomplishments, including audited financialstatements and such periodic reports ofactivities as may be required; and

k. Performs other functions as may be assigned bythe Secretary/Director.

Section 183. Composition of the MRF Committee

The Mine Rehabilitation Fund Committee shall be composed ofthe following:

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a. Regional Director as Chair;b. Regional Executive Director (RED) of the

Department as Co-Chair;c. Representative of the Autonomous Regional

Government, where this is applicable, asMember;

d. Representative from the Local Government Unitas Member;

e. Representative from the local NGOs andcommunity organizations, including People'sOrganizations, church or civic organizations, asMember; and

f. Representative of the Contractor/Permit Holderas Member.

In case the Regional Director and/or the Regional ExecutiveDirector could not personally attend a meeting or function of the MRFCommittee, he/she shall designate or appoint a representative who shallbe duly authorized in writing to have full power and authority to act inhis/her behalf.

The Regional Office shall provide the technical, secretariat andadministrative supports, as may be deemed necessary, to theCommittee.

Section 184. Meetings of the MRF Committee

The Committee shall hold quarterly meetings: Provided, Thatany member of the Committee may call a special meeting as he/she maydeem necessary: Provided, further, That notices of the meetings statingthe date, time, place and agenda therefor shall be sent by theCommittee Chair or Co-Chair to all members at least ten (10) workingdays before the intended date of the meetings.

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In all meetings, the presence of at least four (4) members shallconstitute a quorum to conduct business. The meetings shall bepresided by the Chair or, in his/her absence, by the Co-Chair. In theabsence of the Chair and the Co-Chair, the meetings shall be presidedby either of their representatives. Unless otherwise provided herein, amajority vote of the members present in the meeting shall be required togive effect to any resolutions or decisions of the Committee. Thepresiding officer of the meeting shall not vote in any matter broughtbefore the Committee except in case of a tie.

The Committee shall provide the CLRF Steering Committeewith a copy of the minutes of its meetings within seven (7) working daysafter each meeting.

Section 185. The Multipartite Monitoring Team

A Multipartite Monitoring Team (MMT) shall be deputized bythe MRF Committee, as provided for in Section 182 hereof, to serve asthe monitoring arm of said Committee and shall be composed of thefollowing:

a. Representative from Regional Office as Head;b. Representative from Department Regional

Office as Member;c. Representative of the Contractor/Permit Holder

as Member.d. Representative from the affected

community(ies) as Member;e. Representative from the affected Indigenous

Cultural Community(ies), if any, as Member;and

f. Representative from an environmental NGO.

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The MMT may request the MRF Committee for technicalassistance when deemed necessary. The Head of the MMT shallsubmit to the MRF Committee, at least five (5) working days before thescheduled regular meetings of the latter, a report on the status and/orresult of its monitoring activities as provided for in Section 174 hereof,copy furnished the CLRF Steering Committee.

Section 186. Disbursements from the MRF

Withdrawal from the MRF shall be made by theContractor/Permit Holder only with the written instruction to the bankissued by the MRF Committee authorizing the Contractor/PermitHolder to withdraw the amount from the MRF. The amount to bewithdrawn shall be in accordance with the AEPEP and shall beapproved by the MRF Committee, copy furnished the CLRF SteeringCommittee.

Any one of the following shall be authorized to issue theinstruction to the bank on behalf of the MRF Committee:

a. The Chair,b. The Co-Chair orc. The designated representative of either (a) or (b).

In the event that none of the above-mentioned persons issuesthe instruction to the bank after the lapse of thirty (30) calendar daysfrom the time the written request for instruction is received by them, theContractor/Permit Holder shall have the authority to sign the instructionon behalf of the MRF Committee and to withdraw the amount inaccordance with the approved AEPEP.

Section 187. Final Mine Rehabilitation/Decommissioning Plan

Five (5) years before the final decommissioning of thecontract/mining area, the Contractors/Permit Holders shall submit to the

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MRF Committee through the Regional Office and to the CLRF SteeringCommittee through the Bureau its final mine rehabilitation and/ordecommissioning plan(s), including its financial requirements up to post-decommissioning over a ten-year period for monitoring purposes. Theplan shall be subject to pre-evaluation by the MRF Committee and tofinal approval by the CLRF Steering Committee.

Detailed guidelines regarding the implementation of this Sectionshall be formulated by the Secretary through the Director.

Section 188. Penalties

Failure of the Contractor/Permit Holder to establish a MineRehabilitation Fund shall be sufficient ground to suspend or cancel themining operations in the areas under contracts.

Section 189. Mine Waste and Tailings Fees Reserve FundMine waste and tailings fees shall be collected semiannually

from each operating Contractor/Lessee/Permit Holder based on theamounts of mine waste and mill tailings it generated for the said period.The amount of fees collected shall accrue to a Mine Waste and Tailings(MWT) Reserve Fund and shall be deposited in a Governmentdepository bank to be used for payment of compensation for damagescaused by any mining operations. The MWT Reserve Fund shall alsobe utilized for research projects duly approved by the CLRF SteeringCommittee which are deemed necessary for the promotion andfurtherance of its objectives.

Section 190. Mine Waste and Tailings Fees (MWTF)The basic fees that shall accrue to the MWT Reserve Fund shall

beP= 0.05/MT of mine waste produced andP= 0.10/MT of mill tailingsgenerated from the mining operations except where such mine wasteand mill tailings were utilized in the following manner:

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a. Filling materials for underground mine openings;b. Filling materials for surface mine openings:

Provided, That such materials shall not affectnatural drainage systems as may be determinedby the Committee or its duly authorizedrepresentative;

c. Filling materials for engineered tailings dams,roads and housing areas: Provided, That suchareas shall not affect natural drainage systemsas may be so determined by the Committee orhis/her duly authorized representative:Provided, further, That those with tailingsimpoundment/disposal system that were foundto have discharged and/or to be dischargingsolid fractions of tailings into areas other thanthe approved tailings disposal area shall pay P=50.00/MT without prejudice to other penaltiesand liabilities the Contractor/Lessee/PermitHolder shall be subject to under other existinglaws, rules and regulations: Provided, finally,That said amount shall accrue to the MWTReserve Fund;

d. Concreting and manufacture of concreteproducts; and

e. Mine waste impounded for future use:Provided, That a two-year work program onthe utilization of the said materials shall besubmitted together with the semiannual report:Provided, further, That said materials shall beutilized for its beneficial use within a period oftwo (2) years. Mine waste materials, which arenot utilized within the two-year period, shall be

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charged the corresponding fee ofP= 0.05/MT.Non-submission of the work program shallmean disqualification from exemption frompayment of fees.

Mining companies utilizing engineered and well-maintained minewaste and tailings disposal systems with zero-discharge ofmaterials/effluent and/or with wastewater treatment plants whichconsistently meet Department standards shall also be exempted frompayment of mine waste and tailings fees.

The Secretary, upon the recommendation of the Director, isauthorized to increase the said fees when national interest and publicwelfare so require.

Section 191. Payment of Mine Waste and Tailings Fees Due

Mine waste and tailings fees shall be payable to the Bureauwithin forty-five (45) calendar days after the end of each semester.They shall be based on the sworn semiannual report (MGB Form No.18-1) that shall be submitted to the Bureau, copy furnished theconcerned Regional Office, by each operatingContractor/Lessee/Permit Holder stating, among others, the following:

a. The amounts of mine waste and/or mill tailingsproduced, contained/stored/ impounded and/orutilized; and

b. The manner by which the mine waste and/ormill tailings produced were utilized.

Contractors/Lessees/Permit Holders with no mine waste normill tailings generated shall likewise submit sworn semiannual reportsstating that for the said period no such materials were generated fromtheir operations.

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Section 192. Penalties

Non-submission of semiannual reports shall mean non-availmentof the exemption from payment of mine waste and tailings fees and apenalty ofP= 5,000.00

Failure to comply with payments of the mine waste and tailingsfees provided under Sections 190 and 191 hereof shall mean a tenpercent (10%) surcharge on the principal amount for every month ofdelay.

The Contractor/Lessee/Permit Holder shall be duty bound topay for damages incurred due to previously exempted mine waste andtailings as described in Section 190 hereof.

Payments for the mine waste and tailings generated, which werepreviously requested for exemption from payment of fees but weredenied based on the verification report, shall be remitted to the Bureauwithin sixty (60) calendar days upon receipt of notice. Failure tocomply with the said provision shall mean a ten percent (10%)surcharge on the principal amount for every month of delay.

Section 193. The Contingent Liability and Rehabilitation FundSteering Committee

An Interagency Contingent Liability and Rehabilitation Fund(CLRF) Steering Committee shall be created and shall have thefollowing duties and responsibilities:

a. Evaluates and approves/disapproves thesubmitted EPEP and consults with credibleexperts and advisory body(ies), as may berequired, to clarify proposals and to discuss theadequacy of control and rehabilitationmeasures;

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b. Monitors the MRFs that shall be establishedand deposited in a Government depositorybank in accordance with the provisions of theseimplementing rules and regulations;

c. Resolves issues involving the final minerehabilitation and decommissioning that shall beimplemented;

d. Hires credible experts to do independentstudies and researches on the environmental,engineering and sociocultural impacts of theprojects in order to assist it in making judiciousdecisions;

e. Monitors and evaluates the performance of theMRF Committees;

f. Administers the Mine Waste and Tailings FeesReserve Fund;

g. Evaluates and decides on all applications forcompensation for damages and awardscompensations therefor;

h. Prescribes documentary requirements forapplications for compensation for damages;

i. Appoints and/or designates members of theTechnical Working Group to serve as thetechnical staff of the Committee and RegionalInvestigation and Assessment Teams, asprovided for in Sections 196 and 198 hereof, toassist the Committee in the investigation andassessment of the claims for compensation fordamages: Provided, That the Committee shallexercise general supervision over them;

j. Provides appropriate funds from the MRFs andMWT Reserve Fund for the development andimplementation of research and other special

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projects, which are deemed necessary inpromoting the environmental objectives of theseimplementing rules and regulations;

k. Implements duly approved guidelines, rules andregulations;

l. Formulates policy recommendations tostrengthen the environmental provisions of theseimplementing rules and regulations forconsideration of the Secretary;

m. Recommends to the Secretary the granting ofallowances to officials and personnel performingfunctions and duties relative to the effectiveimplementation of these implementing rules andregulations;

n. Prepares and submits to the Secretary, withinthirty (30) calendar days after the end of eachyear, an annual report of accomplishments andsuch periodic reports of activities, as may berequired; and

o. Performs other functions as may be assigned bythe Secretary.

Section 194. Composition of the CLRF Steering CommitteeThe CLRF Steering Committee shall be composed of the

following officials or their duly authorized representatives:a. Director as Chair;b. Director of Environmental Management Bureau

as Vice-Chair;c. Director of Lands Management Bureau as

Member;d. Director of Forest Management Bureau as

Member;e. Director of Bureau of Soils and Water

Management as Member;

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f. Director of Bureau of Plant Industry asMember;

g. Director of Bureau of Fisheries and AquaticResources as Member;

h. Administrator of the National IrrigationAdministration as Member; and

i. Assistant Director of the Bureau as CommitteeCoordinator.

In case the Chair and/or the Vice-Chair can not personallyattend a meeting or function of the CLRF Steering Committee, he/sheshall designate or appoint a representative, who shall be duly authorizedin writing to have full power and authority to act in his/her behalf.

The Bureau shall provide the secretariat and administrativesupports, as may be deemed necessary, to the CLRF SteeringCommittee.

Section 195. Meetings of the CLRF Steering Committee

The Committee shall hold quarterly meetings: Provided, Thatany member of the Committee may call a special meeting as he/she maydeem necessary: Provided, further, That notices of the meetings statingthe date, time, place and agenda therefor shall be sent by theCommittee Chair or Vice-Chair to all members at least ten (10)working days before the intended date of the meetings.

In all meetings, the presence of at least five (5) members shallconstitute a quorum to conduct business. The meetings shall bepresided by the Chair or, in his/her absence, by the Vice-Chair. In theabsence of the Chair and the Vice-Chair, the meetings shall be presidedby either of their representatives. Unless otherwise provided herein, amajority vote of the members present in the meeting shall be required to

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give effect to any resolutions or decisions of the Committee. Thepresiding officer of the meeting shall not vote in any matter broughtbefore the Committee except in case of a tie.

Section 196. The Technical Working GroupTo assist the CLRF Steering Committee, a Technical Working

Group (TWG) shall be created in the Bureau and shall have thefollowing functions:

a. Acts as technical staff to the CLRF SteeringCommittee;

b. Receives, processes and evaluates thesubmitted EPEP as to its form and substance,imposes additional requirements anddocumentation deemed necessary and consultswith credible experts, including the Director ofthe Philippine Social Science Council, Directorof the National Museum, Offices of theNorthern and Southern Cultural Communities,as well as other advisory body(ies) that may berequired to clarify proposals and to discuss theadequacy of control and rehabilitationmeasures;

c. Conducts annual environmental audit to ensurethat the approved EPEPs/AEPEPs shall bestrictly implemented by the Contractors/PermitHolders;

d. Conducts continuing studies and research onpolicy options, strategies and approaches toeffective implementation of environmentalprotection and enhancement programs andrecommends such measures as may be requiredto address therefor to the Committee;

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e. Verifies the amounts of mine waste and milltailings generated by Contractors/Lessees/Permit Holders;

f. Computes and collects the mine waste andtailings fees to be paid byContractors/Lessees/Permit Holders;

g. Receives, processes, evaluates and conductspreliminary investigations, if necessary, of claimsfor damages and submits appropriaterecommendations to the CLRF Committee;

h. Assists in the investigation and assessment ofclaims for damages and submits appropriaterecommendations to the CLRF SteeringCommittee;

i. Develops, packages and recommends researchand other special projects concerning miningand the environment;

j. Determines/estimates/prepares the cost ofrehabilitating damaged industrial, commercial,residential, agricultural and forest lands, marineand aquatic resources and placer and lodesmall-scale mining areas caused primarily bymining operations;

k. Coordinates and monitors the activities of theRegional Investigation and Assessment Teams(RIAT) as provided for in Section 193 hereof;

l. Drafts guidelines, rules, regulations, resolutionsand other documents in connection with theenvironmental provisions of these implementingrules and regulations; and

m. Performs other functions as may be assigned bythe CLRF Steering Committee.

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Section 197. Contingent Liability and Rehabilitation SteeringCommittee Administrative Fund

The Director shall ensure that adequate budget shall beallocated every year from its regular appropriation for the CLRFSteering Committee and shall include sufficient maintenance andoperating budgets for actual field and travel expenses needed duringmine site inspections, cost of in-house and external training, monthlyhonoraria for members of said Committee, cost of supplies andmaterials, cost of communication services and adequate capital outlayfor the purchase of required photocopying machines, computers,microfiche machines and other support equipment.

The Director shall likewise allocate adequate financial supportfrom the MRFs for the cost of consultancy and other expenses that aredeemed necessary in carrying out the functions of the Committee relatedto EPEP evaluation and monitoring.

Section 198. The Regional Investigation and AssessmentTeams (RIAT)

To assist the CLRF Steering Committee in the investigation andassessment of the claims for compensation for damages, there shall beRegional Investigation and Assessment Teams (RIAT), which shall becomposed of representatives from the Regional Offices and othermember agencies whose services are deemed needed. The RIAT shallbe headed by the Regional Director and shall have the followingfunctions:

a. Provides advice to interested parties on mattersrelated to claims for compensation for damagesunder these implementing rules and regulations;

b. Provides applications and other related forms toprospective claimants for damages;

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c. Receives applications for compensation fordamages under these implementing rules andregulations;

d. Conducts field investigations and assessmentsof claims for damages (MGB Form No. 18-3)and submits reports to the CLRF SteeringCommittee through the TWG;

e. Creates, whenever and wherever deemednecessary, Local Task Forces to assist theRIAT in carrying out its functions; and

f. Performs other functions that may be assignedby the Director.

Section 199. Application for Compensation for Damages

Compensable damages are those damages caused by anymining operations on lives and personal safety; lands, agricultural cropsand forest products, marine life and aquatic resources, cultural andhuman resources; and infrastructure and the revegetation andrehabilitation of silted farm lands and other areas devoted to agricultureand fishing.

The following are qualified to apply for compensation fordamages:

a. Any individual, in the event of loss or damage tohis/her life, personal safety or property;

b. Any private owners of damaged infrastructures,forest products, marine, aquatic and inlandresources;

c. Any applicant or successor-in-interest fordamage to private lands who holds title or anyevidence of ownership;

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d. Any applicant or successor-in-interest fordamage to alienable and disposable lands;

e. Any agricultural lessors, lessees and sharetenants for damage to crops; and

f. Any Indigenous Cultural Community in case ofdamage to burial grounds and culturalresources.

Provided, That any damage caused to the property of a surface owner,occupant or concessionaire, as provided for in Chapter X on SurfaceRights, shall be governed by the pertinent provisions of said chapter.

Application for compensation for damages under theseimplementing rules and regulations shall be filed in a prescribedapplication forms (MGB Form No. 18-2) with the RegionalInvestigation and Assessment Teams within thirty (30) calendar daysfrom the occurrence of the damage.

Applications should be supported by the following documents:

a. Proof of ownership, such as tax declaration,perfected land titles, homestead and free patent.It should be understood, however, that taxdeclarations shall be honored as proof ofownership only for the purposes ofcompensation under these implementing rulesand regulations;

b. Receipt of expenditures for improvements madein the affected property(ies); and

c. Other requirements that may be required by theCLRF Committee.

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Section 200. Evaluation of and Compensation for Claims forDamages

The following guidelines shall apply in the evaluation of claimsfor damages under these implementing rules and regulations:

a. Amounts paid as compensation for claims fordamages shall be drawn from the mine wasteand tailings fees collected fromContractor(s)/Lessee(s)/Permit Holder(s), asmay be determined by the CLRF SteeringCommittee: Provided, That in case theassessed amount of damage exceeds the minewaste and tailings fees paid for, the concernedContractor(s)/Lessee(s)/Permit Holder(s) shallbe duty bound to pay for the remaining balance;

b. Damages to lives and personal safety shall becompensated at an amount as provided for inother pertinent laws;

c. Damages caused to agricultural lands, whichrender such lands useless for the traditionalpurpose for which they were intended for, may becompensated at an amount equivalent to either oneof the following, whichever is lower:

1. The fair market value of the lands asper tax declaration; or

2. The cost of rehabilitation of the land;

d. Damages to agricultural lands resulting in partialloss of productivity may be compensated at anamount equivalent to the costs of rehabilitation;

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e. Damages to industrial and residential lands maybe compensated at an amount equivalent to thecosts of rehabilitation;

f. Damages resulting in total or partial loss ofagricultural crops, forest products and/or inlandaquatic resources may be compensated at anamount equivalent to the loss of projected netincome therefrom;

g. Damages to infrastructures may becompensated at an amount equivalent to thecosts of rehabilitation to be determined by theCLRF Steering Committee;

h. The amount of compensation for damages shallbe based on the amount claimed or the amountassessed, whichever is lower;

i. In case of private leased lands, compensationunder these implementing rules and regulationsshall be paid in accordance with the sharingagreement between the private landowner(s)and the lessee(s). In the absence of such anagreement, seventy-five percent (75%) of thecompensation shall be paid to the lessee andtwenty-five percent (25%) shall be paid to thelandowner;

j. Damages compensated by the operating miningcompany(ies) shall no longer be consideredcompensable under these implementing rulesand regulations: Provided, That writtenapproval has been secured from the CLRFSteering Committee. Such payment shall becredited to the concerned Contractor/ Lessee/Permit Holder for the next paying period. Awaiver signed as a condition for payment of

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such compensation by the Contractor/Lessee/Permit Holder shall also be considered as awaiver under these implementing rules andregulations;

k. Any damage to burial grounds and culturalresources of an Indigenous Cultural Communityshall be compensated in an amount to bedetermined by said Community, the concernedLocal Government Unit and/or the NationalMuseum; and

l. The decision of the CLRF Committee shall befinal and executory unless appealed to theSecretary within thirty (30) calendar days fromreceipt of the decision.

CHAPTER XIXCONFLICTS/ADVERSE CLAIMS/OPPOSITIONS

Section 201. Creation of Panel of ArbitratorsThere shall be a Panel of Arbitrators in the Legal Staff of the

Regional Office composed of three (3) members, two (2) of whommust be members of the Philippine Bar in good standing and one (1) alicensed Mining Engineer, Geologist or a professional in a related fieldall duly designated by the Secretary as recommended by the Director.Those designated as members of the Panel shall serve as such inaddition to their work in the Department without additionalcompensation. The Regional Office shall provide administrative supportand structure to the Panel of Arbitrators.

As much as practicable, the members of the Panel shall comefrom the different bureaus of the Department in the region. Thepresiding officer thereof shall be selected by the drawing of lots.His/her tenure as presiding officer shall be on a yearly basis. Themembers of the Panel shall perform their duties and obligations in

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hearing and deciding cases until their designation is withdrawn orrevoked by the Secretary.

Section 202. Jurisdiction of Panel of Arbitrators

The Panel of Arbitrators shall have exclusive and originaljurisdiction to hear and decide on the following:

a. Disputes involving rights to mining areas;b. Disputes involving Mineral Agreements, FTAAs

or Permits;c. Disputes involving surface owners, occupants

and claimholders/ concessionaires; andd. Disputes pending before the Regional Office

and the Department at the date of the effectivityof the Act: Provided, That appealed casesbefore the Department shall be under thejurisdiction of the Mines Adjudication Board.

The rules and regulations governing the litigation and dispositionof cases before the Panel of Arbitrators shall be promulgated by theMines Adjudication Board as provided for in Section 207 hereof:Provided, That cases presently pending before the different Panels mayproceed in accordance with the rules promulgated thereby.

Section 203. Filing of Adverse Claims/Conflicts/Oppositions

Notwithstanding the provisions of Sections 21, 38 and 55hereof, any adverse claims, protest or opposition specified in saidSections may also be filed directly with the Panel of Arbitrators withinthe prescribed periods for filing such claim, protest or opposition asspecified in said Sections.

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Section 204. Substantial Requirements for Adverse Claims,Protests and Oppositions

No adverse claim, protest or opposition involving mining rightsshall be accepted for filing unless verified and accompanied by theprescribed docket fee and proof of services to the respondent(s), eitherpersonally or by registered mail: Provided, That the requirement for thepayment of docket fees shall not be imposed on pauper litigants.

Likewise, no adverse claims, protest or opposition shall beentertained unless it contains the names and addresses of the adverseparty, protestant, oppositor and the respondent and their respectivecounsels, if any; a detailed statement of the facts relied upon; thegrounds for adverse claim, protest or opposition; and an exhaustivediscussion of the issues and arguments raised; together with allsupporting plans, documents, data and other documentary evidencesand affidavits of all witnesses.

Section 205. Period to Decide the Case

The Panel shall render its decision within thirty (30) days, afterthe submission of the case by the parties for decision.

Section 206. Execution and Finality of Decision

The decision of the Panel of Arbitrators shall become final andexecutory after the lapse of fifteen (15) days from receipt of the noticeof decision by the aggrieved party, unless the latter appeals to the MinesAdjudication Board within the same period. Where an appeal is filed,the concerned Panel of Arbitrators shall transmit the notice thereoftogether with the records of the case within five (5) days to the MinesAdjudication Board.

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Upon the finality of the decision of the Panel of Arbitrators, noappeal having taken therefrom, the Chairman of the Panel of Arbitratorsshall issue a writ of execution directing the Sheriff of the Regional TrialCourts, with jurisdiction over the area, to implement and execute thewrit.

CHAPTER XXMINES ADJUDICATION BOARD/APPEALS

Section 207. Mines Adjudication Board

There shall be a Mines Adjudication Board composed of three(3) members. The Secretary shall be the Chairman with the Directorand Undersecretary for Field Operations of the Department asmembers thereof. The Board shall promulgate its own internal rules andregulations governing its administration and disposition of appealedcases.

The Board shall promulgate the rules and regulations governingthe following:

a. Litigation and disposition of mining cases beforethe Panel; and

b. Administration and disposition of appealedcases before the Board.

Section 208. Secretariat

The Bureau shall act as the Secretariat of the Board and shallbe provided with permanent and full time administrative support withsufficient funding in its annual budget appropriation.

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Section 209. Period to Resolve Appeal

The Board shall resolve the appeal within thirty (30) days fromsubmission of the case by the parties for decision.

Section 210. Powers and Functions of The Board

The Board shall have the following powers and functions:

a. To promulgate rules and regulations governingthe hearing and disposition of cases before it, aswell as those pertaining to its internal functions,and such rules and regulations as may benecessary to carry out its functions;

b. To administer oaths, summon the parties to acontroversy, issue subpoenas requiring theattendance and testimony of witnesses or theproduction of such books, papers, contracts,records, statement of account, Agreements andother document as may be material to a justdetermination of the matter under investigationand to testify in any investigation or hearingconducted in pursuance of this Act;

c. To conduct hearings on all matters within itsjurisdiction, proceed to hear and determine thedisputes in the absence of any party theretowho has been summoned or served with noticeto appear, conduct its proceedings or any partthereof in public or in private, adjourn itshearing at any time and place, refer technicalmatters or accounts to an expert and to accepthis/her report as evidence after hearing of the

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parties upon due notice, direct parties to bejoined in or excluded from the proceedings,correct, amend or waive any error, defect orirregularity, whether in substance or in form,give all such directions as it may deemnecessary or expedient in the determination ofthe dispute before it and dismiss the miningdispute as part thereof, where it is trivial orwhere further proceedings by the Board are notnecessary or desirable;

d. To hold any person in contempt, directly orindirectly, and impose appropriate penaltiestherefor; and

e. To enjoin any or all acts involving or arisingfrom any case pending before it which, if notrestrained forthwith, may cause grave orirreparable damage to any of the parties to thecase or seriously affect social and economicstability.

In any proceedings before the Board, the rules of evidenceprevailing in courts of law or equity shall not be controlling and it is thespirit and intention of this Act that shall govern. The Board shall useevery and all reasonable means to ascertain the facts in each casespeedily and objectively and without regard to technicalities of law orprocedure, all in the interest of due process. In any proceedings beforethe Board, the parties may be represented by legal counsel. Thefindings of fact of the Board shall be conclusive and binding on theparties and its decision or order shall be final and executory.

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Section 211. Petition for Review by Certiorari

The decision of the Board may be reviewed by filing a petitionfor review with the Supreme Court within thirty (30) days from receiptof the order or decision of the Board.

CHAPTER XXIGOVERNMENT SHARE IN MINERAL

AGREEMENTS/FTAAs

Section 212. Government Share in Mineral Production SharingAgreement

The total Government share in a Mineral Production SharingAgreement shall be the excise tax on mineral products as provided forin R. A. No. 7729.

Section 213. Government Share in Other Mineral AgreementsThe share of the Government in Co-Production and Joint

Venture Agreements shall be negotiated by the Government and theContractor taking into consideration: (a) capital investment in theproject, (b) risks involved, (c) contribution of the project to theeconomy and (d) other factors that will provide for a fair and equitablesharing between the parties.

The Government shall also be entitled to compensation for itsother contributions which shall be agreed upon by the parties and shallconsist, among other things, the Contractor's income tax, excise tax,Special Allowance, withholding tax due from the Contractor's foreignstockholders arising from dividend or interest payments to the saidforeign stockholders, in case of a foreign national, and all such othertaxes, duties and fees as provided for in existing laws.

Section 214. Government Share in FTAA

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The Government share in an FTAA shall consist of, amongother things, the Contractor's corporate income tax, excise tax, SpecialAllowance, withholding tax due from the Contractor's foreignstockholders arising from dividend or interest payments to the saidforeign stockholder in case of a foreign-owned corporation and all suchother taxes, duties and fees as provided for in existing laws.

The Government share in an FTAA shall be negotiated by theGovernment and the Contractor taking into consideration:

a. Capital investment of the project;b. Risks involved;c. Contribution of the project to the economy;d. Technical complexity of the project;e. Contribution to community and Local Government; andf. Other factors that will provide for a fair and equitable

sharing between the parties.

The collection of Government share shall commence after theFTAA Contractor has fully recovered its pre-operating, exploration anddevelopment expenses, inclusive. The period of recovery which isreckoned from the date of commercial operation shall be for a periodnot exceeding five (5) years or until the date of actual recovery,whichever comes earlier.

Section 215. Government Share in Mineral Agreements andFTAAs Within Mineral Reservations

For Mineral Production Sharing Agreements, other MineralAgreements or FTAA within the Mineral Reservations, the Governmentshare shall be in addition to the royalties payable to the Government.

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Section 216. Place and Manner of Payment and Allocation ofGovernment Share

The Government share in a Mineral Agreement and FTAA asprovided for in Sections 212 to 215 hereof, shall be paid to the nearestBureau of Internal Revenue (BIR) office where the mining/contract areais located and in accordance with existing BIR rules and regulations.

The Government share in mining operations within MineralReservations shall be paid directly to the Bureau in addition to theroyalty provided for in Section 13 hereof. The share of the Bureaufrom this royalty shall be paid separately and directly to the Bureau.

The Government share shall be allocated in accordance withSections 290 and 292 of R.A. No. 7160, otherwise known as the"Local Government Code of 1991." In case the development andutilization of mineral resources are undertaken by a Government-ownedor controlled corporation, the sharing and allocation shall be inaccordance with Sections 291 and 292 of the said Code.

CHAPTER XXIITAXES AND FEES

Section 217. Taxesa. Income Tax - After the lapse of the income tax

holiday, as provided for in the OmnibusInvestment Code of 1987, as amended, theContractor shall pay income tax provided for inthe National Internal Revenue Code, asamended.

b. Excise Tax on Mineral Products - TheContractor shall pay the excise tax on mineral

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products as provided for in Section 151 of theNational Internal Revenue Code, as amended,in accordance with the following:

1. On all metallic minerals, a tax based onthe actual market value of the grossoutput thereof at the time of removal, incase of those locally extracted orproduced; or the value used by theBureau of Customs in determining tariffand customs duties, net of excise taxand value-added tax in the case ofimportation in accordance with thefollowing schedule:

i. For copper and other metallicminerals except gold andchromite -

Period of Production Excise Tax Rate

June 24, 1994 - June 23, 1997 1.0%June 24, 1997 - June 23, 1999 1.5%June 24, 1999 and onwards 2.0%

ii. Gold and chromite - a tax oftwo percent (2%).

2. On all non-metallic minerals and quarryresources, a tax of two percent (2%)based on the actual market value of theannual gross output thereof at the timeof removal, in case of those locallyextracted or produced; or the value

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used by the Bureau of Customs indetermining tariff and customs duties,net of excise tax and value-added tax inthe case of importation.

Section 218. Occupation Fees

There shall be collected from any Contractor or Permittee onpublic or private lands, an annual occupation fee in accordance with thefollowing schedule:

a. For areas outside Mineral Reservations -

1. Exploration Permit - Ten Pesos (P=10.00) per hectare or fraction thereofper annum;

2. Mineral Agreements and FTAAs - FiftyPesos (P=50.00) per hectare or fractionthereof per annum; and

b. For areas inside Mineral Reservations -

1. Exploration Permits, MineralAgreements and FTAAs - OneHundred Pesos (P=100.00) per hectareor fraction thereof per annum.

The Secretary is authorized to increase the occupation feesprovided herein when the national interest and public welfare so require,upon the recommendation of the Director.

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Section 219. Manner and Place of Payment of Occupation FeesThe occupation fees shall be paid on the date the Mineral

Agreement/FTAA is registered with the appropriate office and on thesame date every year thereafter. It shall be paid to the Treasurer of theMunicipality/City where the onshore mining areas are located, or to theBureau in case of offshore mining areas. For this purpose, theappropriate officer, (the Director for FTAAs or the Regional Directorfor Mineral Agreements) shall submit to the Treasurer of theMunicipality/City where the onshore mining area is located, a completelist of all onshore mining rights registered with his/her office, indicatingtherewith the names of the holders, area covered in hectares, name ofMunicipality/City and its provincial location and date of registration. Ifthe fee is not paid on the date specified, the Contractor shall pay asurcharge of twenty-five percent (25%) of the amount due in addition tothe occupation fees.

If the applied area lies in several municipalities, the Director inthe case of Mineral Reservations or the Regional Director in the case ofareas outside Mineral Reservations shall determine the amount to bepaid by the Contractor based on official maps available in the respectiveoffices and endorses the same to the concerned Municipal/CityTreasurer. If disagreements arise from this payment later, the ProvincialGovernor shall decide on the proportionate amount to be paid to themunicipalities.

Section 220. Allocation of Occupation FeesThirty percent (30%) of all occupation fees collected from

Permittee/Contractor in onshore mining areas shall accrue to theprovince and seventy percent (70%) to the municipality where theonshore mining areas are located. In a chartered City, the full amountshall accrue to the concerned City.

Section 221. Other Fees and Charges

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Filing fees and other charges for services rendered by theBureau and/or its Regional Office shall be payable in accordance withthe fees and charges in Annex 5-A.

CHAPTER XXIIIINCENTIVES

Section 222. Incentives Available to Contractors andPermittees

Investment incentives granted under Executive Order No. 226(EO 226), as amended, and otherwise known as the "OmnibusInvestment Code of 1987," the Act and other laws shall be madeavailable to Contractors/Permittees subject to their compliance with theprovisions and implementing rules and regulations of the said laws.However, fiscal and non-fiscal incentives sought to be availed of shallrequire prior approval from the agency administering the incentives.

The incentives granted under Sections 91, 92 and 93 in ChapterXVI of the Act are additional incentives aside from those availableunder the Omnibus Investment Code of 1987, as amended. They areavailable to all Contractors in Mineral Agreements or FTAAs only tothe extent in which they are engaged in activities covered by theirrespective Agreements.

Section 223. Availment of Incentives under EO 226, asAmended

Contractors can avail of fiscal and non-fiscal incentives grantedunder EO 226, as amended, subject to their registration with the Boardof Investments (BOI) and compliance with requirements provided for inthe order and its rules and regulations. Exploration Permitteesregistered with BOI can also avail of fiscal incentives under EO 226, as

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amended, but only for the duration of the Permits or effectivity of EO226 as amended, whichever comes first. BOI registration andenjoyment of incentives under said registration shall be governed by theInvestment Priorities Plan subject to the provisions of EO 226, asamended, applicable rules and regulations and future amendmentsthereof. The incentives availed of under EO 226 shall be administeredby BOI.

No entitlement to any incentive under EO 226 shall accrue toany Contractor prior to the date of approval of its Mineral Agreementor FTAA and/or date of BOI registration, as the case may warrant inthe latter.

All mining activities shall always be included in BOI's listing ofInvestment Priorities Plan.

Section 224. Availment of Incentives for Pollution ControlDevices

Pollution control devices and facilities as herein defined whichwere acquired, constructed or installed by Contractors shall not beconsidered as improvements on the land or building where they areplaced, and as such, shall not be subject to real property and othertaxes or assessments.

The Contractor shall avail of this incentive in writing to theDirector supported by a sworn report containing a detailed list of suchdevices and infrastructure together with relevant maps or diagramsindicating their location and use in the operations. Such report shallinclude the acquisition and installation cost of the devices orinfrastructure, the corresponding amount of tax exemption availed of bythe Contractor. If such devices and infrastructure, after evaluation bythe Bureau, were found necessary and appropriate for the operations,the Director shall issue a Certificate of Tax-Exemption covering thedeclared devices and infrastructure for the purpose of availing of

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exemption from Local Government taxes and assessment. The Directoror his/her representative shall monitor the utilization of these devices andinfrastructure in relation to the Contractor's operation to ascertain thatsuch are used for pollution control purposes.

Separate guidelines to further implement this Section shall beprepared by the Bureau.

Section 225. Availment of Incentive for Income Tax-CarryForward of Losses

A net operating loss without the benefit of income tax-accelerated depreciation incurred in any year during the first ten (10)years of the Contractor's operation may be carried over as a deductionfrom taxable income for the next five (5) years immediately following theyear of such loss: Provided, That the net operating loss shall bededucted from the taxable income derived from the activity covered bythe Mineral Agreement or FTAA.

Losses incurred in activities other than those pertinent to miningoperations can not be carried over. Only such losses attributable tomining operations covered by the Mineral Agreement or FTAA,incurred after the approval of the Mineral Agreement or FTAA andwithin the ten-year period from date of commercial operation of activitycovered by such Agreement shall be considered for purposes ofavailment of incentives on income tax-carry forward of losses.

Applications for availment of the incentive on income tax-carryforward of losses shall be filed with the Bureau within one (1) monthfrom date of filing with the Bureau of Internal Revenue of the IncomeTax Return where net operating loss was deducted.

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The following documentary requirements relative to theapplication for the availment of this incentive should be submitted to theDirector:

a. Two (2) copies of Audited Financial Statement(AFS) and Income Tax Return (ITR) for theyear the net operating loss was incurred;

b. Two copies of the AFS and ITR for the yearthe net operating loss was partially deducted orstatement of projected income for the currentyear (duly certified by an external auditor) fromwhich the net operating loss may be deducted;

c. If the Contractor is engaged in an activity otherthan that covered by the Mineral Agreement orFTAA, the income statement must beaggregated per activity and duly certified by anexternal auditor; and

d. Sworn statement issued by the Contractor as tothe start of commercial operation of the activityapplied for the incentive on income tax-carryforward of losses.

Late filing of application for availment of the incentive on incometax-carry forward of losses shall incur a basic fine of one-half percent(1/2%) of the amount of the net operating loss to be carried over toapplicable taxable year as provided for in Section 92 of the Act plus adaily fine of Five Pesos (P=5.00) but not to exceed One HundredThousand Pesos (P=100,000) which shall be paid to the Bureau.

The net operating loss referred to in this Section shall becomputed in accordance with the provisions of the National InternalRevenue Code. The ten-year period prescribed herein shall be countedfrom the first year of commercial operation in the activity covered by the

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Mineral Agreement or FTAA. The computation of net operating lossshall be subject to post audit by the Bureau of Internal Revenue.

Section 226. Availment of Incentive for Income Tax-Accelerated Depreciation

At the option of the Contractor and in accordance withprocedure established by the Bureau of Internal Revenue, fixed assetsmay be depreciated at the rates authorized under Section 93 of the Act.Fixed assets refer to assets subject to depreciation under the NationalInternal Revenue Code.

Contractors shall avail of this incentive in writing to the Directoraccompanied by a sworn report containing detailed list of the fixedassets relevant to the Contractor's operation together with relevantmaps and diagrams indicating the location and names of the assets.Such report shall include the applicable book value, expected life inyears, depreciation schedule and the fixed asset's use in theContractor's operation.

This incentive may also be availed of for fixed assets acquiredbefore the date of the approval/conclusion of the Mineral Agreement orFTAA, but only to the undepreciated portion of the fixed assets.

As provided for in Section 93 of the Act, fixed assets may bedepreciated as follows:

a. To the extent of not more that twice as fast asthe normal rate of depreciation or depreciatedat normal rate of depreciation if the expectedlife is ten (10) years or less; or

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b. Depreciated over any number of years betweenfive (5) years and the expected life if the latter ismore that ten (10) years and the depreciationthereon allowed as a deduction from taxableincome: Provided, That the Contractor notifiesthe Bureau of Internal Revenue at the beginningof the depreciation period which depreciationrate allowed by this Section will be used.

In computing taxable income, the Contractor may at his/heroption, deduct exploration and development expenditures accumulatedat cost as of the date of the Exploration Permit as well as explorationand development expenditures paid or incurred during the taxable year:Provided, That the total amount deductible for exploration anddevelopment expenditures shall not exceed twenty-five percent (25%)of the Net Income from mining operations. The actual operation shallbe carried forward to the succeeding years until fully deducted.

Net Income from mining operations is defined as gross incomefrom operations less allowable deduction which are necessary or relatedto mining operations. Allowable deductions shall include mining, millingand marketing expenses, depreciation of properties directly used in themining operations: Provided, That such other deductions allowed bythe BIR can also be deducted to arrive at the Net Income. Thisparagraph shall not apply to expenditures for the acquisition orimprovement of property of a character which is subject to theallowances for depreciation.

Either of the following methods shall apply in the treatment ofincome tax-accelerated depreciation in the income statement:

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a. Accelerated depreciation charges may beshown as among the expense items to bededucted from the Net Income; or

b. Depreciation expenses at normal life of theassets may be shown as among the expenseitem to be deducted from the Net Income. Theaccelerated depreciation would be made only inthe adjustment of the taxable income for incomecomputation as an additional expenses.

Section 227. Simultaneous Availment of Incentives under EO226 and Additional Incentives under the Act

The Contractor may avail of either the incentive on IncomeTax-Carry Forward of Losses under Section 92 of the Act or theIncome Tax Holiday provided under EO 226, as amended. If theContractor opts to avail of the Income Tax Holiday incentive under itsBOI registration, if and when applicable, then the incentive on IncomeTax Carry Forward of Losses under the Act should not be granted to itand vice versa. It should then be a choice between Income TaxHoliday or Income Tax-Carry Forward of Losses, with the choice ofthe first availment governing the succeeding availments. There shall beno switching of these two incentives within the entire prescribed periodwithin which the Contractor is entitled to such incentives.

In availing of the Income Tax Holiday incentive under EO 226,as amended, the Contractor shall submit to the BOI a certification fromthe Director that the Contractor has never availed of the incentives onIncome Tax-Carry Forward of Losses under the Act during the term ofthe Mineral Agreement or FTAA. In the same light, Contractorsavailing of the incentive on Income Tax-Carry Forward of Losses shallsubmit a certification from the BOI that the Contractor has never

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availed of the Income Tax Holiday incentive under EO 226, asamended, during the term of the Mineral Agreement or FTAA.

Incentives on Income Tax-Accelerated Depreciation providedunder Section 93 of the Act may be availed of simultaneously with theIncome Tax Holiday provided under the BOI registration.

Section 228. Conditions for Availment of Incentives

The Contractor's right to avail of incentives under Sections 222to 227, shall be subject to the following conditions:

a. Compliance with obligations - The Contractorshall observe and abide by the provisions of theAct and its implementing rules and regulationsand take adequate measures to ensure that itsobligations thereunder are faithfully discharged;

b. Compliance with directives - The Contractorshall comply with the directives and instructionswhich the Bureau may issue from time to time inpursuance of its authority under the law;

c. Visitorial powers - The Contractor shall allowthe duly authorized representatives of theBureau to inspect and examine its books ofaccounts and other pertinent records anddocuments to ascertain compliance with the Actand its implementing rules and regulations andthe terms and conditions of the MineralAgreement or FTAA;

d. Delinquent Contractors - No availment ofincentives may be allowed to a Contractordelinquent in compliance with any of the termsand conditions of the Mineral Agreement or

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FTAA and/or with the terms and conditions ofregistration with BOI as the case may warrant,including submission of reports and statisticaldata which may be required by the Bureauand/or BOI; and

e. Activities not covered by the MineralAgreement of FTAA - The Contractorproposing to engage in activities not covered byits Mineral Agreement or FTAA shall install anadequate accounting system segregating theinvestments, revenues, sales, receipts,purchases, payrolls, costs, expenses and profitsand losses of its operations covered by MineralAgreement or FTAA from those which are notcovered; or the Bureau may, in appropriatecases, require the establishment of a separateentity for the activity covered by the Agreementin order to facilitate the proper implementationof the Act.

Section 229. Investment Guarantees

In addition to the above, the Contractor especially foreigninvestors shall be entitled to the basic rights and guarantees provided inthe Constitution and such other rights recognized by the Government asenumerated hereunder:

a. Repatriation of investments - In the case offoreign investments, the right to repatriate theentire proceeds of the liquidation of theinvestment in the currency in which theinvestment was originally made and at the

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exchange rate prevailing at the time ofrepatriation;

b. Remittance of earnings - In the case of foreigninvestments, the right to remit earnings from theinvestment in the currency in which theinvestment was originally made and at theexchange rate prevailing at the time ofremittance;

c. Foreign loans and contracts - The right to remitat the exchange rate prevailing at the time ofremittance such sums as may be necessary tomeet the payments of interest and principal onforeign loans and foreign obligations arisingfrom technical assistance contracts;

d. Freedom from expropriation - There shall be noexpropriation by the Government of theproperty represented by investments or loans orof the property of the enterprise except forpublic use or in the interest of national welfareor defense and upon payment of justcompensation. In such cases, foreign investorsor enterprises shall have the right to remit sumsreceived as compensation for the expropriatedproperty in the currency in which the investmentwas originally made and at the exchange rateprevailing at the time of remittance;

e. Requisition of investment - There shall be norequisition of the property represented by theinvestment or of the property of the enterprisesexcept in the event of war or nationalemergency and only for the duration thereof.Just compensation shall be determined and paideither at the time of requisition or immediately

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after cessation of the state of war or nationalemergency. Payments received ascompensation for the requisitioned propertymay be remitted in the currency in which theinvestments were originally made and at theexchange rate prevailing at the time ofremittance; and

f. Confidentiality - Any information supplied bythe Contractor which have been agreed uponby the parties in the negotiation as confidentialpursuant to the Act and these implementingrules and regulations shall be treated as suchduring the term of the project to which it relates.However, the following information shall not beclassified as confidential:1. Production and sales of minerals;2. Employment;3. Royalty and tax payments;4. Metallic and non-metallic reserves;5. Operational parameters such as mining

and milling capacities and rates, mineand mill recoveries, dilution factors,etc.; and

6. Other data as may be agreed upon bythe parties.The term confidentiality refers only to

the act of divulging publicly any informationclassified as such. It does not prevent theDirector or his/her representative(s) from usingthe data internally within the Bureau formonitoring and for policy, planning and researchstudies. Documents not otherwise covered bya valid confidentiality Agreement between the

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concerned parties shall be made available to thepublic upon the filing of an appropriate requestduly approved by the authorized officer.Reproduction of such documents shall beallowed upon presentation of an approvedwritten request in sufficient form and payment ofreasonable fees.

CHAPTER XXIVCANCELLATION, REVOCATION AND TERMINATION

OF A PERMIT/MINERAL AGREEMENT/FTAA

Section 230. Grounds

The following are the grounds for cancellation, revocation andtermination of a Mining Permit/Mineral Agreement/FTAA:

a. Violation of any of the terms and conditions ofthe Permits or Agreements;

b. Non-payment of taxes and fees due theGovernment for two (2) consecutive years; and

c. Falsehood or omission of facts in theapplication for Exploration Permit, MineralAgreement, FTAA or other permits which mayalter, change or affect substantially the facts setforth in said statements.

Section 231. Suspension or Cancellation of Tax Incentives andCredits

a. Grounds for cancellation/suspension - TheBureau may suspend or cancel wholly orpartially any incentive granted under the rules

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and regulations for any cause including thefollowing:

1. Any violation of the Act, rules andregulations implementing the same or ofthe terms and conditions in the MineralAgreement or FTAA;

2. Any material misrepresentation or falsestatements made to the Bureau at anytime before or after theapproval/conclusion of its MineralAgreement or FTAA;

3. Whenever the project ceases to beviable and its continued operationwould require additional costs to theeconomy. In this case, the Bureau shallevaluate the status of the project andshall decide if suspension/cancellationshall be imposed;

b. Withdrawal from the Mineral Agreement orFTAA - Whenever a Contractor decides towithdraw from business or suspend itsoperations covered by the Agreement, writtennotice thereof shall be sent to the Directorbefore decision is implemented. Withdrawalfrom business operations shall automaticallycancel the Mineral Agreement or FTAA. Uponsuch withdrawal, the Contractor shall cease tobe entitled to the incentives. The effect ofwithdrawal from business or suspension ofoperations covered by the Agreement shall, ineach particular instance, be determined by the

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Bureau, taking into account the reasonstherefor; or

c. Refund and penalties - In case of cancellation ofthe Mineral Agreement or FTAA, the Bureaumay in appropriate cases, recommend to otherincentive-dispensing agencies the cancellation ofregistration without prejudice to the impositionof the corresponding penalties and refund ofincentives availed of, pursuant to the Act andthese implementing rules and regulations andunder EO 226, laws creating export processingzones and other laws.

Section 232. Effect of Expiration and Cancellation of a Permitand Mineral Agreement/FTAA

Upon the expiration of a Mining Permit/MineralAgreement/FTAA, the mining operations may be undertaken by theGovernment through one of its agencies or through a qualifiedindependent Contractor. In the latter case, the contract shall beawarded to the highest bidder in a public bidding held after duepublication of the notice thereof. The Contractor/Permit Holder shallhave the right to equal the highest bid upon reimbursement of allreasonable expenses of the highest bidder.

Upon cancellation of a Mining Permit/MineralAgreement/FTAA, the Director shall cause the same to be entered inthe registration book and a notice thereof shall be posted on the bulletinboard of the Bureau and Regional Office and the mining area coveredthereby shall thereupon be open to new applicants.

Non-payment of taxes and fees causing for the cancellation of aMining Permit/Mineral Agreement/FTAA shall have also the effect ofre-opening the mining area to new applicants.

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CHAPTER XXVSURVEY OF PERMIT/CONTRACT/MINING AREAS

Section 233. Identification of Meridional Blocks

A system for identifying meridional blocks other thangeographic coordinates shall be established by the Bureau. Theboundaries of a permit/contract/mining area shall coincide with the fullone minute or one-half minute of latitude and longitude based on theNAMRIA map. In cases where such boundaries are not attainable dueto geographic features, environmental considerations, existence ofadjoining valid mining rights or concessions, other areas closed tomining locations, settlement of conflicts and other justifiableconsiderations that render it impractical to conform with suchrequirements, the boundaries shall be defined by specific technicaldescription.

Section 234. Filing of Application for Survey

A Permittee/Contractor shall file an application for Order ofSurvey of the perimeter boundary of the permit/contract/mining areasimultaneous with the submission of the Declaration of the MiningProject Feasibility and to be accompanied by the following:

a. One (1) set of certified true copy of approvedExploration Permit/FTAA/Mineral Agreement;

b. Pertinent documents such as Deed ofAssignment and Power of Attorney dulyregistered with the Bureau/concerned RegionalOffice;

c. A notarized Survey Service Contract executedby and between the Permittee/Contractor andthe deputized Geodetic Engineer, except when

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the deputized Geodetic Engineer is employedby the applicant and/or company interested inthe survey: Provided, That proof ofemployment of the deputized Geodetic Engineeris submitted;

d. Affidavit of the deputized Geodetic Engineerrepresenting that he/she can execute the surveyof the area and to submit the complete surveyreturns thereof within the period prescribed bythese implementing rules and regulations;

e. A surety bond (Annex 5-A) for Order ofSurvey, which shall be forfeited for failure of thedeputized Geodetic Engineer to execute and/orcomply with his/her obligations; and

f. Proof of payment of the required fees (Annex5-A).

However, any Contractor or applicant whose MPSA/FTAAAgreement/application was granted/filed in accordance with theimplementing rules and regulations of E.O. No. 279, may avail of theprovision of this Section.

Section 235. Issuance of Order of Survey

Upon verification of the application for Order of Survey (MGBForm No. 25-1) and compliance with the requirements in the precedingsection, the Director/concerned Regional Director shall issue the Orderof Survey in the prescribed form (MGB Form No. 25-2).

Section 236. Mineral Land Surveys

Mineral land surveys shall be executed by Geodetic Engineersof the Bureau/Regional Offices, deputized Geodetic Engineers in private

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practice and company-employed deputized Geodetic Engineersdeputized by the Director/Regional Director.

Section 237. Execution of Mineral Land Surveys

Corners of the permit/contract/mining area shall be defined bymonuments placed at intervals of about four hundred fifty (450) metersapart. When the boundary lines of the permit/contract/mining areatraverses mountain or rolling terrain, the intermediate monumentsbetween corners shall be established on ridges, whenever practicable, inwhich cases, all consecutive corners shall be intervisible.

The corner monuments of a permit/contract/mining area shall beas follows:

a. 20 cm x 20 cm x 50 cm concrete rectangularmonuments set 40 cm in the ground forprincipal corners which fall on points with exactminutes or half minute of latitude and longitude;and

b. 15 cm in diameter x 50 cm long set 40 cm inthe ground for other corners of thepermit/contract or mining area.

Such corners of the permit/contract/mining area shall beidentified by concrete monuments or cement patches on boulders,centered with a hole, spike, pipe or nail and marked with thecorresponding corner numbers and survey numbers. The latitude andlongitude of the principal corners shall also be indicated on the sides ofthe concrete monuments when they coincide with the full one (1) minuteand/or one-half (1/2) minute of latitude and longitude.

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When the permit/contract/mining area adjoins submerged land,a witness corner monument along the boundary leading to the shorelineshall be set on the ground to witness the boundary point-corner of themining rights at the mean low tide level of the sea or lake. Concretemonuments, galvanized iron pipes, fixed rocks, boulders or stakes andother monuments shall be set to define the corners of the mining rightsalong the shoreline at mean low tide level.

All area computations, plans and maps ofpermit/contract/mining areas to be submitted to the Bureau/RegionalOffice for verification and approval shall be prepared using thePhilippine Plane Coordinate System (Annex 25-A).

Should any discrepancy of datum plane between or among tiepoints arise, proper investigation shall be conducted by theBureau/concerned Regional Office and a report thereon shall besubmitted to form part of the survey returns for further investigation andrecord purposes.

Survey plans of permit/contract/mining areas recorded underthese implementing rules and regulations shall be drawn to scale indrawing ink on the prescribed form (MGB Form No. 25-3).

The execution of mineral lands surveys shall be in accordancewith these implementing rules and regulations, as supplemented by theapplicable provisions of the Revised Manual of Lands Surveys of thePhilippines pursuant to Lands Administrative Order No. 4 dated July 3,1980: Provided, That PRS-92 may be used in the execution of mineralland surveys during the transition period (1993-2000) pursuant to theprovisions of Department Administrative Order No. 22, Series of 1994:Provided, further, That reference points enumerated in Annex 25-Bcan still be used if standardized and converted into PRS-92 subject toimplementing guidelines that may hereinafter be issued.

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Section 238. Submission of Survey ReturnsSurvey returns shall be submitted to the Director/concerned

Regional Director within one (1) year from receipt of the Order ofSurvey and shall consist of the following:

a. Duly notarized field notes with cover (MGBForm No. 25-4) accomplished, signed andsealed by a deputized Geodetic Engineer;

b. Azimuth computations from astronomicalobservations (MGB Form No. 25-5),topographic survey computations (MGB FormNo. 25-6), traverse computations (MGB FormNo. 25-7), area computations (MGB FormNo. 25-8), coordinate conversion - geographicto grid (MGB Form No. 25-9) and coordinateconversion - grid to geographic (MGB FormNo. 25-10) and other reference computations,all in sets of original and duplicate, properlyaccomplished, signed and sealed by a deputizedGeodetic Engineer;

c. Microfilm plan(s) in appropriate scale dulyaccomplished with the corresponding workingsheet thereof;

d. Descriptive and field investigation report on thepermit/contract/mining area in quintuplicate,duly signed by the deputized Geodetic Engineerand authorized assistant, if any, and dulynotarized; and

e. A certification under oath by the BarangayCaptain that the survey was actually undertakenin the locality.

Incomplete survey returns shall not be accepted for verificationand approval purposes.

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Except for reasons of force majeure, failure to submit thesurvey returns within the prescribed period shall cause the cancellationof the Mining Permit/Mineral Agreement/FTAA. If the survey returnsare filed through the mail, the date appearing on the postmark shall beconsidered as the date of filing. However, thePermittee/Contractor/concerned deputized Geodetic Engineer shallnotify the Director/concerned Regional Director by telegram/faxmessage not later than the deadline for the filing of the survey returnsthat he/she has filed the same through the mail.

Corners and/or location monuments of verified survey returns ofmining right areas, in spite of the nullity, cancellation, rejection orabandonment of the mining rights over the surveyed area, shall bepreserved as reference marks and the geographic position thereof shallbe kept for use in future mineral land surveys, unless otherwise saidsurvey is found to be erroneous by later approved mineral land surveys.

Section 239. Withdrawal of Order of Survey

If the Director/concerned Regional Director finds that thedeputized Geodetic Engineer has violated any of the terms andconditions of the Order of Survey or the survey service contract, or hasfailed to execute the survey and submit the Survey Returns within theprescribed period, the Director/concerned Regional Director shallwithdraw the existing authority over the subject area, forfeit thecorresponding bond and shall not issue any new Order of Survey infavor of the said deputized Geodetic Engineer without prejudice to anycriminal, professional or other liabilities arising out from such failure,violation or misrepresentation.

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Section 240. Withdrawal of Defective Survey Returns

The deputized Geodetic Engineer or his/her duly authorizedrepresentative may withdraw documents within thirty (30) calendar daysupon receipt of notice from the Bureau/concerned Regional Office forcorrection of errors, discrepancies and/or deficiencies of the submittedsurvey returns. A period of ninety (90) calendar days from the date ofwithdrawal of the said survey returns is given to the deputized GeodeticEngineer or his/her duly authorized representative to re-submit the samewithout any extension save for reason of force majeure. Failure of thedeputized Geodetic Engineer to re-submit the withdrawn survey returnswithin the prescribed period shall cause the revocation of the surveyorder and confiscation of his/her surety bond and non-issuance of newsurvey order over the subject area.

Section 241. Field Verification and Approval of Survey Plan

Upon submission of the corrected survey returns, theDirector/concerned Regional Director shall cause the immediate fieldverification of the subject area. Thereafter, the survey plan shall besubmitted to the Director/concerned Regional Director for approval ofthe same within fifteen (15) working days from receipt thereof.

Section 242. Non-Transferability of Order of Survey

Order of Survey is non-transferable except in cases of death,physical incapacity of the deputized Geodetic Engineer, or any othercauses which render it impracticable to execute the survey, subject tothe approval of the Director/concerned Regional Director: Provided,That the execution of the survey shall be completed within the remainingperiod covered by the original Order of Survey.

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CHAPTER XXVIDRILLING OF AREAS BY THE BUREAU

Section 243. General Provisions

In line with the policy of the Government to hasten theexploration, development and utilization of the mineral resources of thecountry and to address the water crisis and other priority concerns ofthe Government, the Bureau may conduct exploration in any areas otherthan Mineral Reservations upon its own initiative or upon request byclaimant/Contractor/Permittee in areas covered by existing and validmining claims/contracts/permits: Provided, That whatever expenses thatmay be incurred thereof shall be taken from the appropriation of theBureau or from the requesting party, as the case may be.

Section 244. Priority Areas

The Director shall determine whether the area is included in thepriority list of areas and contains critical minerals included in the mineraland water development programs of the Government.

If it is ascertained that the area should be explored, a contractbetween the Contractor/claimant/Permittee and the Director shall beexecuted to include, among others, a statement that the Bureau shallconduct the necessary geological studies on the area and, if warranted,undertake diamond drilling, test pitting, trenching or auger drillingoperations thereon.

In case the drilling reveals substantial ore reserves to warrantcommercial mining operations, the Contractor/claimant/Permittee aswell as his/her successor(s) or assignee(s) shall then take all stepsrequired to secure any mode of Mineral Agreement.

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Section 245. Reimbursement

Upon completion of exploration activities by the Bureau in openareas other than Mineral Reservations, it shall render a certified reporton the total expenses incurred thereon. Any interested party who wishto apply for a mining right shall reimburse to the Bureau the certifiedamount plus an interest of twelve percent (12%) of the expenses.

Section 246. Lease of Drilling Equipment

The Director may lease the drilling equipment of the Bureau toPermittees, Lessees, Contractors and Permit Holders desiring toconduct exploration and development work on the area applied for.

Drilling equipment may be leased upon application by anyQualified Person with the Director.

Section 247. Preferential Right to Lease

In case there are two or more applications, the Director shallgrant the Lease Agreement to the first applicant who has satisfactorilycomplied with all the requirements.

Section 248. Terms and Conditions of the Drilling LeaseAgreement

The terms and conditions of the Drilling Lease Agreement arethe following:

a. The lessee shall have an approved ExplorationPermit;

b. The drilling equipment shall be used exclusivelyfor exploration purposes in the areas specifiedin the Agreement;

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c. The drilling equipment shall not be subleased toany person, partnership or corporation;

d. The lessee shall satisfactorily comply with all therequirements imposed by the Director;

e. The lease shall be for a minimum period of three(3) months from the date specified in the LeaseAgreement;

f. The Lease Agreement may be renewed by theDirector when the evaluation of the drillingresults justifies the continuation of the drillingprogram: Provided, That the lessee has notviolated any terms and conditions of the originalLease Agreement;

g. The Director or his/her duly authorizedrepresentative shall see to it that the drillmachine pump and accessories are properlyused and maintained;

h. The Director or his/her duly authorizedrepresentative may conduct an inspection of thedrilling operation at any time during the term ofthe lease at the expense of the lessee;

i. The lessee shall pay the daily rental plus asurcharge of 100% per day for failure to returnthe leased equipment as stipulated in theAgreement;

j. The lessee has not violated any terms andconditions of previous Lease Agreement; and

k. The violation of any terms and conditions of theLease Agreement shall be a ground forcancellation of the same.

Section 249. Rights and Obligations of the Lessee

The following are the rights and obligations of the lessee:

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a. The lessee shall maintain and keep theequipment in good working condition during theterm of the lease until it is returned to theBureau;

b. The lessee shall replace and/or repair all partsrendered unusable through breakage, loss orabnormal wear during the term of the lease. Allparts missing at the time the equipment isreturned shall be replaced within one (1) monthfrom the time such equipment are returned. Forthis purpose, the lessee shall make the requiredcash deposit. If the lessee returns theequipment in bad condition and fails to restorethem into running condition or fails to replacethe missing parts or accessories within theallowable time, the lessor shall use the cashdeposit and/or forfeit the bond without priornotice to the lessee to put the equipment backinto running condition or replace any missingaccessories. The lessee shall be required todeposit additional cash to defray the above-mentioned expenses if the original cash depositfor the purpose is insufficient;

c. Transportation of the drilling equipment and allits accessories from the Bureau and return shallbe for the lessee's account;

d. The lessee shall submit monthly to the Directorall the information, data and footage obtainedthrough drilling which shall be treated asconfidential. Such information, however, shallbe made available to the public after a period oftwo (2) years;

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e. The lessee shall pay the required monthly rental fee(Annex 26-A);

f. To guarantee the faithful compliance with the termsand conditions of the Lease Agreement and toanswer for any loss and/or damage of theequipment during the term of the lease, the lesseeshall file with the Bureau the required surety bondissued by a company accredited by the InsuranceCommission, which may either be in cash or with asurety satisfactory to the Director;

g. The lessee shall pay in advance an amountcorresponding to two (2) months rentals and perdiems including transportation expenses of one (1)driller upon the signing of the contract of LeaseAgreement. The rentals and per diems forsucceeding months shall be due and payable at thebeginning or the first day of every month;

h. Rentals not paid within thirty (30) calendar daysafter they become due and payable shall bear asurcharge of five percent (5%) per month until fullypaid. Rentals shall continue to be charged forreturned equipment not in running condition and foraccessories lost or missing until repaired andreplaced respectively; and

i. Balance of rentals and per diems paid and/or depositsmade after termination of the lease shall be appliedto pending obligations of the lessee with the lessor.Excess rentals or deposits shall be refunded to thelessee.

Section 250. Receipts from Rentals

All rentals fees of drilling equipment shall accrue to theDrilling Fund which shall be used for the purchase of

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supplies, materials and spare parts needed in the repair ofsaid drilling equipment subject to the provisions ofCommonwealth Act No. 246, as amended.

CHAPTER XXVIIFISCAL PROVISIONS AND SCHEDULE OFPAYMENTS AND CHARGES FOR WORKWHICH THE BUREAU MAY PERFORM

Section 251. Occupation Fees, Rentals, Royalties, Taxes

Proof of payment of the occupation fees shall be submitted tothe concerned Regional Office. Holders of mining leases, QuarryPermits and contracts shall submit to the Regional Director evidencethat the rentals and taxes on the occupied premises and the royaltiesdue the Government arising out of the operation thereof had beenpaid when applicable.

Section 252. Work Authorized

Consistent with the provisions of Section 7 hereof, the Bureaumay perform or accomplish work or service for Government offices,agencies, instrumentalities or private parties and collect payment orcharge therefor in accordance with the schedule hereinafterprescribed, which work or service shall include, but shall not belimited to, the following:

a. To execute surveys of mining claims and othermineral lands for location, patent, permit, contracts,lease or development purposes;

b. To docket and conduct office and fieldinvestigations of conflicting mining locations;

c. To perform geological, geophysical andgeochemical surveys in onshore and offshore

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areas and make mineralographic, petrologic,petrographic and paleontologic examinations;

d. To verify and investigate mineral discoveriesand locations, exploration and developmentwork;

e. To perform fire and wet assays and smeltingand metallurgical tests of ores and to sampleore piles for shipment;

f. To check and evaluate ore reserves for theSecurities and Exchange Commission, for otherGovernment entities and/or private parties whomay request or order for such work;

g. To perform drafting or projection work;h. To issue blue or white prints of survey plan or

sketch plan; andi. To do such other work and/or service to

interested parties as may be requested andwhich is within the scope of the functions of theBureau.

Section 253. Mines Survey and Investigation and MonitoringFund

All payments and charges for work performed or to beperformed by the Bureau/Regional Office shall accrue to the MinesSurvey, Investigation and Monitoring Fund of the Bureau/RegionalOffice to be deposited as Trust Fund against which shall be chargedexpenses in connection with any of the work mentioned in Section 252hereof, which expenses shall include salaries and wages, travelexpenses, supplies and materials, sundry expenses and purchase offurniture and equipment: Provided, That any balance in the payment orcharge left after the completion of the work requested may be used bythe Bureau/Regional Office in the maintenance of the work force and

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equipment necessary to render the work or services authorized in thisorder: Provided, further, That if the work is discontinued due to somereasonable cause, whatever balance remaining after deducting theexpenses already incurred by the Bureau/Regional Office in connectionwith the work, shall be refunded by the Director/concerned RegionalDirector to the applicant upon the latter's request.

Section 254. Request for Work

Request for survey, investigation, analysis or examination ofmineral or rock sample or any other work performed by the Bureaushall be submitted in the form prescribed for the purposes: Provided,That if the prescribed form is not available, the request may be made inletter form. The request shall contain, among others, the name andaddress of the person or entity requesting the work and a full andcomplete information of the work desired.

Section 255. Time of Making Payment

Payment, based on schedule of payments and charges hereinprescribed (Annex 5-A), unless otherwise stated, shall first be made bythe applicant before any work requested shall be performed orexecuted.

Section 256. Services to Local Government Offices,Instrumentalities or Agencies

For services or work requested by National or LocalGovernment offices, instrumentalities or agencies, the schedule ofpayments and charges herein prescribed shall apply.

Section 257. Reservation to Reject Any Job RequestThe Bureau may reject any job request when the nature of the

work is considered impractical or when the work at hand is of such

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volume as to prevent the request from being complied with and whichwill seriously impair the other work of the Bureau or endanger the livesor health of the personnel of the Bureau.

Section 258. Use of Reports on Work Done

Reports of said investigation, examination, or analysis shall be treated asconfidential. However, copies thereof may be furnished other persons uponwritten request and approval of the person for whom the report was made:Provided, That any information and/or data contained in said reports shall beavailable for official use of the Bureau in connection with its studies of minerals,mines and mineral industry of the Philippines: Provided, further, That suchreports may be released to the public after the lapse of two (2) years from theirsubmission unless the Secretary and/or the Director directs otherwise.

Section 259. Work Not Covered by the Schedule

For work or service not covered by this schedule, the payment orcharges therefor shall be determined and approved by the Director

Section 260. Charges for Fieldwork, In General

Charges for the following fieldwork shall be by man days:

a. For field verification of approved surveys forcontract/mining area, investigation of conflicts,renewal or extension of mining contract andpermit, verification of tax-exempt equipment,verification of ore stockpile and umpiring of oreshipments, inspection of mechanical andelectrical installation, verification of miningoperations done by Permittees/Contractors,

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verification of explosive magazines and blastingschemes and conducting ventilation, dust andgas surveys,P= 1,000 per man per day, providedthat the minimum charge isP= 3,000.

b. For evaluation of mining claims or geologicalinvestigation and geological verification ofmining properties,P= 1,000 per man per day,provided the minimum charge isP= 3,000.

c. Counting of the number of working days shallstart from the day the fieldman leaves his/herofficial station and ends upon his/her return.

d. In addition to the charges under Paragraphs (a)and (b) above, the applicant or interested partyshall pay for the transportation of Bureaupersonnel from the official station to the areaand return, as well as expenses for freight,labor, materials and analyses of samples.

CHAPTER XXVIIIRECORDING SYSTEM AND MINERAL GAZETTE

Section 261. Mining Recorder Unit

The Bureau and its Regional and other offices shall have aMining Recorder Unit in their respective offices to receive, record andmanage all mining documents submitted by concerned individuals orcompanies relating to mining rights. However, same unit may beestablished in Provincial Governor's/City Mayor's Office.

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Documents relating to applications for Mineral Agreements,FTAAs, Exploration Permits and Small-Scale Mining Permits in MineralReservations shall be registered at the Bureau.

Documents relating to applications for Mineral Agreements,FTAAs and Exploration Permits outside Mineral Reservations andIndustrial Sand and Gravel Permits covering more than five (5) hectaresshall be registered at the Regional Offices.

Documents relating to applications for Quarry Permits, Sandand Gravel Permits, including Industrial Sand and Gravel Permitscovering five (5) hectares or less, Guano Permits, Gemstone GatheringPermits and Small-Scale Mining Permits outside Mineral Reservationsshall be registered at the Provincial Governor's or City Mayor's Officewhere the area applied for is located.

The functions of the Mining Recorder Unit shall include thefollowing:

a. Pre-processing of applications particularly thedocumentary provisions of these implementingrules and regulations;

b. Computation of fees to be paid by theapplicant;

c. Recording of mining documents;d. Providing information and advice on the status

of applications;e. Inputting data relating to applications, contracts

and permits into the Mining Rights ManagementSystem;

f. Organizing and maintaining record holdings onmining rights applications in accordance withstandard records management practices;

g. Issuing certifications and copies of miningdocuments;

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h. Follow-up compliance of requirements neededin the processing of mining rights applications;and

i. Projection/verification of area applied for eitherthrough the mining rights management system orcontrol maps of the unit if free from miningconflict.

Section 262. Mining Register

A mining register is a hardbound logbook, arranged in rows andcolumns, for chronologically recording a set of documents received bythe Mining Recorder.

The following shall have their own mining register:

a. Applications for mining rights:

1. Exploration Permits;2. Mineral Agreements;3. FTAAs;4. Quarry, Sand and Gravel, Guano,

Gemstone Gathering Permits; and5. Small-Scale Mining Permits

b. Mining rights involving:

1. Exploration Permits;2. Mineral Agreements;3. FTAAs;4. Quarry, Sand and Gravel, Guano,

Gemstone Gathering Permits; and5. Small-Scale Mining Permits

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c. Miscellaneous Documents:

1. Powers of Attorney;2. Deeds of Assignment/Transfer/

Conversion;3. Operating Agreements;4. Protests or Adverse Claims; and5. All other instruments concerning or

affecting mining rights.

All applications for mining rights shall be recorded in theircorresponding mining register with the following information, amongothers:

a. Application number;b. Date and time of filing;c. Applicant's/Proponent's name;d. Location;e. Area applied for in blocks/hectares;f. Official receipt number; andg. Amount paid.For approved mining rights, the contract or permit number and

the Contractor's or Permit Holder's name should be recorded in lieu ofapplication number and applicant's/proponent's name, respectively.

All miscellaneous documents shall be recorded in theirrespective mining registers containing the following information:

a. Date and time of filing,b. Document or application number,c. Entity involved,d. Document title,e. Page number,f. Book number,g. Year series,

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h. Amount paid andi. Official receipt number.

Section 263. Administrative Fees relating to MiningRegistration

Before any of the documents enumerated in Section 261 can beregistered, payment of the required fees in accordance with the ratesspecified in Annex 5-A shall be made. The amount, receipt number andtime of payment shall be recorded in the appropriate mining register.

Section 264. Registration and Filing Procedures

Upon compliance with the documentary requirements andpayment of required fees, all documents subject for registration shall berecorded immediately in the appropriate mining register in black ink bythe Mining Recorder.

Copies of applications for mining rights and their supportingdocuments shall be compiled with and bound in durable folders/boxesarranged chronologically and each page of the document consecutivelynumbered starting from the bottom page of the earliest document, hereinreferred to as a marked page. A document inventory report indicatingthe contents of the folder/box beginning from the marked page number1 shall be maintained at all times. The document inventory report shallcontain the following:

a. Document control number;b. Marked page number(s) of the document; andc. Brief description of the document.The document control number is a unique number recorded in

the general receiving and releasing logbook of the Bureau or RegionalOffice. The Regional Office shall submit to the Bureau an annual

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document inventory report which shall serve as a guide for easy retrievaland reconstruction of file in case of loss.

For miscellaneous documents, their physical files shall becompiled according to type (that is, Special Power of Attorney, Deedof Transfer, etc.); numbered consecutively in the order of time and dateof receipt; and bound in a book form beginning with Book 1 and wherepracticable, each book to contain two hundred fifty (250) documents.An inventory report of each book shall also be maintained and providedto the Bureau annually. Original copies should be kept as restricted filesinaccessible to unauthorized persons. Photocopies or extra duplicatecopies, bound in book form, will be kept in shelves as working copiesfor public use.

Duplicate copies of miscellaneous documents shall be sent tothe Bureau within thirty (30) calendar days from date of registration forarchiving purposes: Provided, That a certified photocopy issued andsigned by the Mining Recorder could serve the purpose in the absenceof a duplicate copy.

Section 265. Mining Document Archive

A national mining document archive shall be established at theBureau and maintained by its Mining Recorder. Original or duplicatecopies of applications/contracts/permits and relevant documents sent byRegional Offices shall be filed in this archive to produce a replica of theregional records. Copies of these documents sent by Regional Officesshall contain the control numbers and the marked page numbers writtenon the original document to guide the filing of the records.

A microfilm or digital copy of each relevant record, if available,may replace the paper records in the archive. The Bureau shall planand acquire an efficient and appropriate technology for archiving thesedocuments.

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Section 266. Mineral Rights Management System

In order to facilitate the mechanical processing and recording ofapplications/contracts/permits and provide a systematic basis for themanagement of data relating to applications/contracts/permits, acomputer-based Mining Rights Management System shall beestablished and maintained by the Bureau and its Regional Officeswhich may be updated and improved as the need arises. This systemshould not only guide and expedite the mechanical processing ofapplications but should also be capable of building up a nationaldatabase and producing reports and maps that may be required by theBureau and its Regional Offices or requested by its clients and linking orinterfacing with other mining industry-related systems which the Bureaumay later acquire or develop.

A set of standards covering procedures, programming, datacodes, data definitions, training, operating system/platform and relatedmatters shall be established by the Bureau to guide the operation anddevelopment of the system. A system documentation and a user'smanual shall be produced and maintained for each new version.

A guideline on the operation and establishment of theresponsibility of the Bureau and its Regional Offices on theimplementation of the system is given in Annex 28-A, which may alsobe updated as the need arises.

Section 267. Mineral Resources Database SystemA mineral resources database shall also be established at the

Bureau and concerned Regional Office(s) to record all exploration andrelated data from its own projects and those submitted by mining rightsholders to serve as repository of such information for national andregional policy and planning studies, monitoring and research purposes.

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This database should be designed to be accessed by the mining rightsmanagement system provided for in the previous Section and othermining industry-related systems to be established or acquired by theBureau.

Section 268. Mineral Gazette Publication

To provide an official medium for releasing information onmining policy issuances of the Government, mining rules and regulations,current listing of mining rights and their locations on the map, otherofficial acts affecting mining and other information relevant to mineralresources development, a Mineral Gazette of nationwide circulationshall be organized and established by the Bureau. This Gazette shall bepublished at least annually and be made available to libraries of theDepartment, the Bureau, its Regional Offices, U.P. Law Center, theNational Library, appropriate information offices or ProvincialGovernments and Municipal Offices and such other places as may bedetermined by the Director: Provided, That such Gazette shall also bemade available for subscription to the public at a reasonable price.

Section 269. Recording System and Publication Fund

The Director and Regional Directors shall ensure that adequatebudget shall be allocated every year from their regular appropriations toeffect and sustain the physical filing and recording setup, the publicationof the Mineral Gazette and the development, operation and maintenanceof Mining Rights Management System, the mineral resources databasesystem and other mining industry-related system which the Bureau mayestablish or acquire.

Funds to be allocated for the Mining Rights ManagementSystem shall include adequate capital outlay for the purchase of therequired softwares, hardwares and support equipment and theirsubsequent upgrades. Funds shall also be provided for transportation

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and travel expenses needed in troubleshooting, in-house training, repairsand upgrading of hardwares and related equipment, cost of supplies andmaterials, cost of external training, subscription services and cost ofcommunication services for data exchange and system coordination.

CHAPTER XXIXREPORTING REQUIREMENTS AND FINES

Section 270. Reporting Requirements

Every Contractor/Permittee/Permit Holder or holder of aMineral Processing Permit or its operator is required to submit thefollowing reports:

a. Monthly Report On Production, Sales andInventory of Metallic Minerals and Employment

A Contractor or its operator or holderof Mineral Processing Permit shall submit to theDirector a sworn Monthly Report onProduction, Sales and Inventory of MetallicMinerals and Employment as prescribed inMGB Forms Nos. 29-1 to 29-9, whichevermineral is applicable, within fifteen (15) workingdays after the end of each calendar month.

b. Monthly Report On Production, Sales andInventory of Non-Metallic Minerals andEmployment

In the case of Mineral Agreements,FTAAs or Mineral Processing Permits involving

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non-metallic minerals, a Contractor or itsoperator or Permit Holder shall submit to theconcerned Regional Director, copy furnishedthe Director, a sworn Monthly Report onProduction, Sales and Inventory of Non-Metallic Minerals and Employment asprescribed in MGB Form No. 29-10 withinfifteen (15) working days after the end of eachcalendar month.

c. Quarterly Report on Production, Sales andInventory of Quarry Resources (Except Sandand Gravel) and Employment

A holder of a Quarry Permit or itsoperator shall submit to the ProvincialGovernor/City Mayor, copy furnished theDirector and concerned Regional Director, asworn Quarterly Report on Production, Salesand Inventory of Quarry Resources andEmployment as prescribed in MGB Form No.29-11 within fifteen (15) working days after theend of each calendar quarter.

d. Monthly Report on Production, Sales andInventory of Industrial Sand and Gravel andEmployment

A holder of an Industrial Sand andGravel Permit or its Operator shall submit to theDirector, copy furnished the concernedRegional Director, a sworn Monthly Report onProduction, Inventory and Sales of Industrial

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Sand and Gravel and Employment asprescribed in MGB Form No. 29-12 withinfifteen (15) working days after the end of eachcalendar month.

e. Monthly Report on Production and Sales ofCommercial Sand and Gravel and Employment

A holder of a Commercial Sand andGravel Permit or its Operator shall submit to theProvincial Governor/City Mayor, copyfurnished the Director and concerned RegionalDirector, a sworn Monthly Report onProduction, Sales and Inventory of CommercialSand and Gravel and Employment asprescribed in MGB Form No. 29-13 withinfifteen (15) working days after the end of eachcalendar month.

f. Quarterly Report on Production and Sales ofSmall-Scale Metallic Mines and Employment

The holder of a Small-Scale MetallicMines Permit shall submit to the ProvincialGovernor/City Mayor, copy furnished theDirector and concerned Regional Director, asworn Quarterly Report on Production andSales of Small-Scale Metallic Mines andEmployment as prescribed in MGB Form No.29-14 for metallic minerals other than gold orMGB Form No. 29-15 for gold mineral only,within fifteen (15) working days after the end ofeach calendar quarter.

g. Integrated Annual Report

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A Contractor or Mineral ProcessingPermit Holder or its operator shall submit to theDirector a sworn Integrated Annual Reportusing prescribed MGB Form No. 29-16 withintwo (2) months after the end of each calendaryear.

A holder of a Quarry Permit or itsOperator shall likewise submit same report(MGB Form No. 29-16) to the concernedProvincial Governor/City Mayor, copyfurnished the Director and the concernedRegional Director, within two (2) months afterthe end of each calendar year.

All books of accounts, reports andcorrespondences shall be filed and kept by theContractor/Quarry Resources Permit Holder orits Operators and shall be open at all times forverification by the Director or its dulyauthorized representative.

A Small-Scale Mining Permit Holdershall submit to the Provincial Governor/CityMayor, copy furnished the Director and theconcerned Regional Director, a swornIntegrated Annual Report for Small-ScaleMines as prescribed in MGB Form No. 29-17within two (2) months after the end of eachcalendar year.

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h. Quarterly Energy Consumption Report

A Contractor or Mineral ProcessingPermit Holder or its Operator shall submit tothe Director, copy furnished the concernedRegional Director, a Quarterly EnergyConsumption Report using prescribed MGBForm No. 29-18 within fifteen (15) workingdays after the end of each calendar quarter.

A holder of a Quarry Permit or itsOperator shall submit to the ProvincialGovernor/City Mayor, copy furnished theDirector and the concerned Regional Director,a Quarterly Energy Consumption Report usingprescribed MGB Form No. 29-18 withinfifteen (15) working days after the end of eachcalendar quarter.

i. Quarterly Drilling Report

A Contractor or Permittee conductingany drilling project or a lessee of a Bureau drillmachine shall submit to the Director, a swornQuarterly Drilling Report in its contractarea/Permit Holder/project area within thirty(30) calendar days at the end of each calendarquarter. This drilling report shall include, amongothers, a description of the geology, atopographic-drill collar location map in1:50,000 scale and corresponding drill sectionshowing geology, structures and orebody, ifapplicable; and the core log which shall contain

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the coordinates of the collar elevation, drillinclination, direction and length and thephysical/chemical analysis of the cores.

j. Annual Mineral Reserve Inventory Report

A Contractor or its operator shallsubmit to the Director, copy furnished theconcerned Regional Director, an AnnualMineral Reserve/Resources Inventory Reportusing the prescribed MGB Form No. 29-19,on or before the end of the first quarter of eachcalendar year.

For areas outside Mineral Reservations,a holder of Quarry, Sand and Gravel andSmall-Scale Mining Permit or its operator shalllikewise submit the same report (MGB FormNo. 29-20) to the concerned ProvincialGovernor/City Mayor, copy furnished theDirector and the concerned Regional Director,on or before the end of the first quarter of eachcalendar year. For areas within MineralReservations, the Permit Holder or its operatorshall submit the same report to the Director.

The Contractor/Permittee/operator maysubmit other types of mineral reserve reportprovided that the required information datacontained in the said form must be included intheir report.

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k. Monthly General Accident Report

A Contractor, Permit Holder or itsoperator shall submit to the Regional Office andBureau within fifteen (15) working days aftereach calendar month a Monthly GeneralAccident Report using MGB Form 15-5.

l. Monthly Explosive Consumption Report

Holders of Purchaser's License forExplosives shall submit to the RegionalDirector, copy furnished the Director, aMonthly Explosive Consumption Report withinfifteen (15) working days after each calendarmonth using the prescribed MGB Form 15-8.

m. Semiannual Report on Mine Waste and TailingsGenerated

Refer to relevant section in theseimplementing rules and regulations.

n. Semiannual Status Report on the EnvironmentalWork Program

Refer to relevant section in theseimplementing rules and regulations.

o. Quarterly Report on Production, Sales andInventory of Small-Scale Mines Within MineralReservation

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The holder of a Small-Scale MiningPermit within Mineral Reservation shall submitto the Director, a sworn and verified QuarterlyReport on Production, Sales and Inventory ofSmall-Scale Mines Within Mineral Reservationsas prescribed in MGB Form No. 29-20 withinthirty (30) calendar days after the end of eachcalendar quarter.

p. Annual and Quarterly Status Report based onWork Program of MPSA/FTAA Contractor

Refer to relevant Sections of theseimplementing rules and regulations.

q. Annual Land Use Report

A Contractor or its operator shallsubmit to the Director a sworn annual land usereport within sixty (60) calendar days after eachcalendar year.

r. Other reports as may be required by theDirector

The Contractor of a Mineral Agreementor the holder of a Quarry Permit, any of theSand and Gravel Permits, Guano Permit,Gemstone Gathering Permit or Small-ScaleMining Permit is also required to submit reports(a) to (h) mentioned in this Section, whicheveris applicable to its operation, even when there isno production for a given period. The report,however, should indicate the causes or reasons

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why there was no production for the period.The Director, concerned Regional Director andin the case of quarry resources and Small-ScaleMining Permits, the Provincial Governor/CityMayor shall be promptly notified in writingbefore implementation of any mine suspensionor mine closure.

Submission of the applicable reportcited above shall be made part of the terms andconditions of Mineral Agreements, FTAA,Exploration Permit, Quarry Permit, Sand andGravel Permit, Guano Permit and GemstoneGathering Permit.

Section 271. Fines

In case of late or non-submission of any of the reportsmentioned in Section 270 (a) to (h) and (o), the following fines shall beimposed:

a. Late submission of any of the required reportsincluding copies to be furnished to the Directorand concerned Regional Director.

Basic Fine Daily Fine1st Violation 1,000.00 10.002nd Violation 2,000.00 20.003rd Violation and 3,000.00 30.00subsequent violations

b. Non-submission of any of the required reportsafter one (1) month from the prescribedreporting period.

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Basic Fine Daily Fine1st Violation 2,000.00 20.002nd Violation 3,000.00 30.003rd Violation and 5,000.00 50.00subsequent violations

Provided, That a late report classified undernon-submission category shall not pay theaccumulated fine in (a) but instead pay the finesimposed in (b) of this Section: Provided,further, That the total fine for non-submissionof any of the required reports at any one timeshall not exceed Ten Thousand Pesos (P=10,000.00).

c. Failure of the Contractor or holder of any of thequarry resources permits or its Operator tosubmit any of the reports prescribed in thepreceding Section three (3) months after thethird violation or failure to pay fines within one(1) year shall be sufficient ground forcancellation or non-renewal of a permit,Mineral Agreement or FTAA.

In case of late or non-submission ofreports mentioned in Section 270 (h) to (q)except (m), a fine of One Thousand Pesos (P=1,000.00) shall be imposed. The Secretarymay adjust the above-mentioned fines from timeto time as conditions may warrant suchchanges.

Payment of fines involving the herein cited reports shall be madeto the Treasurer or Cashier of the following offices:

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a. Provincial Governor/ - MGB Form No. 29-11City Mayor - MGB Form No. 29-13

- MGB Form No. 29-14- MGB Form No. 29-15- MGB Form No. 29-17- MGB Form No. 29-18

b. Regional Director - MGB Form No. 29-10(for Mineral Agreements and FTAAs)

c. Director - MGB Forms No. 29-1 to 29-9- MGB Form No. 29-16- MGB Form No. 29-18- MGB Form No. 29-12

CHAPTER XXXTRANSITORY AND MISCELLANEOUS PROVISIONS

Section 272. Non-Impairment of Existing Mining/QuarryingRights

All valid and existing mining lease contracts, permits/licenses,leases pending renewal, Mineral Production Sharing Agreements,FTAA granted under Executive Order No. 279, at the date of the Actshall remain valid, shall not be impaired and shall be recognized by theGovernment: Provided, That the provisions of Chapter XXI onGovernment share in Mineral Production Sharing Agreement and ofChapter XVI on incentives of the Act shall immediately govern andapply to a mining Lessee or Contractor unless the mining Lessee orContractor indicates its intention to the Secretary, in writing, not to availof said provisions: Provided, further, That no renewal of mining leasecontracts shall be granted after the expiration of its term: Provided,finally, That such leases, Production-Sharing Agreements, FTAAs shall

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comply with the applicable provisions of these implementing rules andregulations.

All pending applications for MPSA/FTAA covering forest landand Government Reservations shall not be required to re-apply forExploration Permit: Provided, That where the grant of such FTAAapplications/proposals would exceed the maximum contract arearestrictions contained in Section 34 of the Act, the applicant/proponentshall be given an extension of one (1) year, reckoned from September13, 1996, to divest or relinquish pursuant to Department AdministrativeOrder No. 96-25 in favor of the Government, areas in excess of themaximum area allowance provided under the Act. For this purpose, aSpecial Exploration Permit of limited applications and activities shall beissued by the Secretary upon the recommendation of the Director,subject to the terms and conditions specified in the Permit and pertinentprovisions of Chapter V hereof: Provided, That an area permissionshall be granted likewise by the Secretary to undertake limitedexploration activities in non-critical forest reserves and forestreservations and such other areas within the jurisdiction of theDepartment. In other areas, however, the applicant/proponent shallsecure the necessary area clearances or written consent by theconcerned agencies or parties, as provided for by law: Provided,further, That the time period shall be deducted from the life of theMPSA/FTAA and exploration costs can be included as part of pre-operating expenses for purposes of cost recovery should the FTAA beapproved: Provided, finally, That this provision is applicable only to allFTAA/MPSA applications filed under Department AdministrativeOrder No. 63 prior to the effectivity of the Act and these implementingrules and regulations.

All pending applications for Industrial Sand and GravelIndustrial Permit covering more than five (5) hectares with the LocalGovernment Unit shall be endorsed to the concerned Regional Officefor its processing, evaluation and approval.

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Section 273. Recognition of Valid and Existing Mining Claimsand Lease/Quarry Applications

Holders of valid and existing mining claims, lease/quarryapplications shall be given preferential rights to enter into any mode ofMineral Agreement with the Government until September 14, 1997:Provided, That failure on the part of the holders of valid and subsistingmining claims, lease/quarry applications to exercise their preferentialrights within the said period to enter into any mode of MineralAgreements shall constitute automatic abandonment of the miningclaims, quarry/lease applications and the area thereupon shall bedeclared open for mining application by other interested parties.

Section 274. Separability Clause

If any clause, sentence, section or provision of theseimplementing rules and regulations is held or declared to beunconstitutional or invalid by a competent court, the remaining parts ofthese implementing rules and regulations shall not be affected thereby.

Section 275. Repealing and Amending Clause

Department Administrative Order No. 95-23 and all orders,rules and regulations inconsistent with or contrary to the provisions ofthese implementing rules and regulations are hereby repealed ormodified accordingly. The Secretary shall furthermore have theauthority, inter alia, to amend, revise, add to, clarify, supplement,interpret, delete, or make exemptions (to the extent not contrary to theprovisions of the Act) to any provision of these implementing rules andregulations with the end in view of ensuring that the Act is appropriatelyimplemented, enforced and achieved.

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Section 276. Effectivity

These implementing rules and regulations shall take effect fifteen(15) days following its complete publication in two newspapers ofgeneral circulation.

VICTOR O. RAMOSSecretary