republic act no. 7942

Republic Act No. 7942

AN ACT INSTITUTING A NEW SYSTEM OF MINERAL RESOURCES EXPLORATION,DEVELOPMENT, UTILIZATION, AND CONSERVATION

DENR AO 96-40

Revised Implementing Rules and Regulations of Republic Act No. 7942 Otherwise Known as the

“Philippine Mining Act of 1995”

Declaration of Policy

All minerals are owned by the StateTo promote rational exploration,

development, utilization and conservation

Role of government and private sectorTo enhance national growth that

effectively safeguards the environment and protect the rights of affected communities

Governing principle per DAO 96-40

Sustainable developmentImproving the total quality of lifePrinciple of sustainable miningPro-environment and pro-people miningMining is temporary land useOptimum land useProgressive and engineered mine

rehabilitation

Governing principle per DAO 96-40

Current best practicesWealth-generating opportunitiesEnvironment-responsible endeavoursMining activities must be in accord with

state policies

Important Concepts

Ancestral landsBlock / meridional blockCarrying capacityContiguous zoneContract areaContractorCo-production agreement

Important Concepts

Ecological profile / eco-profileEnvironmental compliance certificate

(ECC)Environment impact assessment (EIA)Environmental impact statement (EIS)Exclusive economic zone (ECZ)Existing mining / quarrying rightExploration

Important Concepts

Financial or technical assistance agreement

Foreign-owned corporationGross outputIndigenous cultural communities (ICC)Joint venture agreementMinerals

Important Concepts

Mineral agreementMineral landMineral resourceMining areaMining operationOffshore v. onshorePermittee

Important Concepts

Pollution control and infrastructure devices

Private landQualified personQuarryingQuarry permitQuarry resources

Important features

1. non-impairment of existing mining / quarrying rights

2. recognition of valid and existing mining claims and lease / quarry applications

Government Management

Ownership of mineral resources in rel. with jura regalia doctrine and §2, Art. 12 of the Constitution

Modes of exploration, development utilization and processing (EDUP) of mineral resources

1. direct

2. mineral contracts with contractors


Mineral reservations

1. reservation of strategic raw materials

2. reservation for scientific, cultural or ecological value

3. submerged lands within the Contiguous Zone (CZ) or Exclusive Economic Zone (EEZ)


4. others when national interests so requires

Periodic review of mineral reservations by the Secretary

State recognition of rights of the IPs/ICCs to their ancestral lands (Free and prior consent rule)

Scope of Application of EDUP of minerals

Areas Open to Mining Operations

1. Public lands

2. Private lands

3. Timberlands

4. Forestlands

5. Ancestral lands


Areas closed to mining operations

1. military and other government reservations

2. Near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or


private works including plantations or valuable crops

3. those covered by valid and existing rights

4. areas expressly prohibited by law

5. areas covered by small-scale miners as defined by law unless with prior consent of the small-scale miners


6. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law and in areas expressly prohibited under


the National Integrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws

Exploration Permit

Concept of exploration permitWho grantsTerms and conditionsRights and obligations of a permittee

1. right to enter, occupy and explore the area

2. obligation to discuss with parties to be

Exploration Permit

affected as to the extent, necessity and manner of entry, occupation and exploration

3. obligation to submit any conflict to a panel of arbitrators

4. obligation to undertake exploration work on the area per permit based on an approved work program

Exploration Permit

5. the permittee may apply for a mineral production sharing agreement, joint venture agreement, co-production agreement or financial or technical assistance agreement over the permit area, which application shall be granted if the permittee meets the necessary qualifications and the terms and conditions of any such agreement:

Exploration Permit

Provided, That the exploration period covered by the exploration permit shall be included as part of the exploration period of the mineral agreement or financial or technical assistance agreement.

Exploration Permit

Declaration of Mining Project Feasibility

1. must be made during the term of the permit

2. must be filed with the Bureau

3. accompanied with a work program for development

Effects of approval of mining project feasibility

Exploration Permit

Transfer or Assignment. – An exploration permit may be transferred or assigned to a qualified person subject to the approval of the Secretary upon the recommendation of the Director

MINERAL AGREEMENTS

MINERAL PRODUCTION SHARING AGREEMENT

Government

exclusive right to conduct mining

operations within a CONTRACT AREA

FINANCING MANAGEMENT

TECHNOLOGY PERSONNEL

GROSS OUTPUT

Co-Production Sharing Agreement

Joint Venture Agreement

Who are eligible to enter into any of the modes of contract

Any QUALIFIED PERSONIf the applicant is in the mining industry,

has a satisfactory environment track record

Filing and Approval of Mining Agreements

Assignment / Transfer of Mineral Agreements

Not prohibitedSubject to the approval of the SENRDoes not cover an FTAAApproval through inaction of the SENR

Withdrawal from Mineral Agreements

1. during the subsistence of the agreement

2. due notice3. operations no longer feasible or viable4. SENR’s decision within thirty (30)

days5. contractor met the financial, fiscal and

legal obligations

Term

1? 20??30???

50??????

Financial or Technical Assistance Agreement (FTAA)

Eligibility1. any QUALIFIED person2. technical or financial capability to

undertake large-scale EDU

Terms and conditions of an FTAA

1. SWORN STATEMENT containing a firm commitment of an amount corresponding to the expenditure obligation that will be invested in the contract area: Provided, That such amount shall be subject to changes as may be provided for in the rules and regulations of this Act


2. financial guarantee bond in favor of the Government equivalent to the expenditure obligation of the applicant for any year

3. proof of technical competence, e.g., track record in mineral resource EDU; details of technology to be employed in the proposed operation; details of technical personnel to undertake the operation


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

5. Representations and warranties that the contractor has, or has access to all the financing, managerial and technical expertise, the technology required to promptly and effectively carry out the


objectives of the agreement with the understanding to timely deploy these resources under its supervision pursuant to the periodic work programs and related budgets, when proper, providing an exploration period up to two years, extendible for another two years but subject to annual review by the


Secretary in accordance with the implementing rules and regulations of this Act, and further, subject to the relinquishment obligations

5. Representations and warranties that, except for payments for dispositions for its equity, foreign investments in local enterprises which are qualified for repatriation, and local supplier’s credits


and such other generally accepted and permissible financial schemes for raising funds for valid business purposes, the contractor shall not raise any form of financing from domestic sources of funds, whether in Philippine or foreign currency, for conducting its mining operations for and in the contract area


7. mining operations shall be conducted in accordance with the provisions of RA 7942 and its IRR

8. Work programs and minimum expenditures commitments;

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


10. preference to Filipinos in all types of mining employment for which they are qualified and that technology shall be transferred to the Filipinos

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


12. undertaking that the contractors shall furnish the Government records of geologic, accounting, and other relevant data for its mining operations,

13. undertaking that book of accounts and records shall be open for inspection by the government;


14. undertaking that the proponent will dispose of the minerals and buy products produced at the highest price and more advantageous terms and conditions

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


Such other terms and conditions consistent with the Constitution and with RA 7946 as the SENR may deem to be for the best interest of the State and the welfare of the Filipino people

FTAA

Negotiations

1. who?

2. who approves?

3. notification requirement to the Congress

Term of FTAAOption to covert into MPSA – conditions

FTAA

Assignment / Transfer – not prohibited, conditions

Withdrawal - conditions

QUARRYING ACTIVITIES

QUARRY PERMIT

1. any QUALIFIED PERSON

2. with the MINING REGULATORY BOARD

3. area – PUBLIC or PRIVATE lands

4. for building or construction materials

5. if large-scale – permittee may enter into a mineral agreements with the State

6. Term – 5 years, max. of 25 years

7. Prohibited areas


Quarry fees and taxesGrounds for cancellation of quarry

permitsKinds of quarry permits

1. commercial sand and gravel

2. industrial sand and gravel

3. exclusive sand and gravel

4. government gratuitous


4. Private gratuitous

5. Guano

6. Gemstone gathering

TRANSPORT, SALE AND PROCESSING OF MINERALS

Ore transport permit Mineral trading registration – registered

with the DTI, accredited by the DENR, registration cc the MGB

Mineral processing agreement – secure from SENR, term – 5 years, max. of 25 years, FOCC not prohibited

DEVELOPMENT OF MINING COMMUNITIES, SCIENCE AND MINING TECHNOLOGY

Social aspect of miningTraining and development of Filipino

manpower in all aspects of the mining activities

No absolute prohibition in the employment of qualified foreign individuals on highly technical and specialized mining operations


Preferential use of indigenous goods, services and technologies

Donations / turnover of facilities

1. prior to cessation of mining activities

2. due to abandonment / withdrawal of operations

3. on public lands only

4. one year from cessation, remove the


facilities; if not, the same shall be turned over or donated tax-free to the proper government authorities, national or local, to ensure that said infrastructure and facilities are continuously maintained and utilized by the host and neighboring communities


Preferential employment of Filipinos

SAFETY AND ENVIRONMENTAL PROTECTION

All contractors and permittees shall strictly comply with all the mines safety rules and regulations concerning the safe and sanitary upkeep of the mining operations and achieve waste-free and efficient mine development


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


Powers of the Regional Director

1. conduct mines inspection

2. issue orders requiring the contractor to remedy any practice connected with mining or quarrying operations which is not in accordance with safety and anti-pollution laws and regulations

3. power to summarily suspend the mining or quarrying operations in case of imminent danger to life or property


Every contractor shall undertake an environmental protection and enhancement program covering the period of the mineral agreement or permit. Such environmental program shall be incorporated in the work program which the contractor or permittee shall submit as an accompanying document to the application for a mineral agreement or permit.

Contents of the Work Program

1. plans relative to mining operations2. rehabilitation, regeneration, revegetation

and reforestation of mineralized areas3. slope stabilization of mined-out and

tailings covered areas, aquaculture, watershed development and water conservation; and,

4. socioeconomic development


Need to procure an ECC, after submission of an EIA, except during the exploration period of a mineral agreement or FTAA


Requirement of rehabilitation

AUXILIARY MINING RIGHTS

Timber rightsWater rightsRight to possess explosivesEasement rightsEntry into Private Lands and Concession

Areas

Governmental share

1. in MPSA 2. in other mineral agreements – fair and

equitable sharing, compensation for its contribution, income tax, excise tax, special allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national, and all such other taxes, duties and fees as provided for under existing laws

Governmental share

3. in FTAA - the contractor’s corporate income tax, excise tax, special allowance, withholding tax due from the contractor’s foreign stockholders arising from dividend or interest payments to the said foreign stockholder in case of a foreign national and all such other taxes, duties and fees as provided for under existing laws (subject to tax holiday privileges)

GROUND FOR CANCELLATION, REVOCATION, AND TERMINATION

1. late or non-filing of requirements2. violation of the terms and conditions of

permits or agreements3. non-payment of taxes and fees4. suspension or cancellation of tax

incentives and credits5. falsehood or omission of facts in the

statement

SETTLEMENT OF CONFLICTS

Panel of Arbitrators

1. each regional office of the DENR

2. composition – 2 from the bar and 1 mining engineer or a related profession

3. original and exclusive jurisdiction

3.1. Disputes involving rights to mining areas;

3.2. Disputes involving mineral agreements or permits;

3.3. Disputes involving surface owners, occupants and claimholders/concessionaires; and,

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


Mines Adjudication Board

1. composition – 3 members


Supreme Court

Rule 45

Court of Appeals

Rule 43 Mines Adjudication Board 3 members powers

within 15 days from receipt of decision

Panel of Arbitrators 3 members original and exclusive juris.

PUNISHABLE ACTS

1. false statements2. illegal exploration3. theft of minerals4. destruction of mining structures5. mines arson6. willful damage to a mine7. illegal obstruction to permittees or

contractors

PUNISHABLE ACTS

8. violations of the terms and conditions of the ECC

9. illegal obstruction to government officials

10. other violations

(pp. 249-250 of sourcebook)

Thanks!!!!

republic act no. 7942

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