History of Small-Scale Mining in the Philippines

Small-scale mining refers to mining activities that rely heavily on manual labor using simple tools and methods. It does not use explosives or heavy mining equipment and requires only a small capital investment.

Small-scale mining in the Philippines has been practiced long before the Spaniards colonized the country. However, until the 70’s, small-scale mining was limited to intermittent alluvial gold placer in which recovery was through direct panning or using crude sluice box.

In the 80’s, it became a significant contributor to the minerals industry and the national economy with the discovery of the gold-rush site in Davao and the sporadic panning activities that followed in thirty-seven (37) other provinces. During that time, production from small-scale and panning activities reached a record high of eleven (11) tons, higher than the production of primary and secondary producers; while over 500,000 miners and their households were directly benefited.

Recognizing the increasing economic impact of small-scale mining sector, the government promulgated Presidential Decree 1899 — one of the first laws that directly governed small-scale mining operations. PD 1899 promoted small-scale mining operations in view of its capacity to generate income for the rural poor.

To further promote, develop, protect and rationalize small-scale mining activities, the Philippine Congress passed in 1991 Republic Act 7076 or the People’s Small-scale Mining Law. The law was principally intended to generate more employment opportunities in small-scale mining, and to bring about equitable sharing of the wealth and natural resources of the country through the implementation of the People’s Small-Scale Mining Program. The DENR subsequently issued Department Administrative Order No. 34 series of 1992, Rules and Regulations to Implement the People’s Small-Scale Mining Program.

The People’s Small-Scale Mining Program

RA 7076 established the People’s Small-Scale Mining Program to be implemented by the Secretary of the Department of Environment and Natural Resources (DENR), through the Provincial/City Mining Regulatory Board (PMRB/CMRB), to achieve orderly, systematic and rational scheme for the small-scale mining development and utilization of mineral resources in certain mineral areas in order to address the social, economic, technical and environmental problems connected with small-scale mining activities.

The Program includes the following features:

• The identification, segregation and reservation of certain mineral lands as People’s Small-Scale Mining Areas;
• The recognition of prior existing rights and productivity;
• The encouragement of the formation of cooperatives;
• The extension of technical assistance and financial assistance, and other social services;
• The extension of assistance in processing and marketing;
• The generation of ancillary livelihood activities;
• The regulation of the small-scale mining industry with the view to encourage growth and productivity; and
• The efficient collection of government revenues.

The Provincial/City Mining Regulatory Board (PMRB/CMRB)

The People’s Small-Scale Mining Law created a Provincial/City Mining Regulatory Board (P/CMRB) in every province/city, which shall be under the direct supervision and control of the DENR Secretary.

The P/CMRB shall be the implementing agency of the DENR of the People’s Small-Scale Mining Program and shall exercise the following powers and functions, subject to review of the DENR Secretary:

• Declare and segregate existing gold-rush areas for small-scale mining;
• Reserve for the future, mineralized areas/mineral lands for People’s Small-Scale Mining;
• Award contracts to small-scale miners’cooperative;
• Formulate and implement rules and regulations related to the People Small-Scale Mining; and
• Settle disputes, conflicts or litigations over conflicting claims within a People’s Small-Scale Mining Area.

Composition of the PMRB/CMRB

• The MGB Regional Director concerned, or his/her authorized representative, as Chair;
• The Provincial Governor/City Mayor, or his/her authorized representative, as Vice-Chair;
• One (1) small-scale mining representative as member;
• One (1) big-scale mining representative as member; and
• One (1) environmental NGO representative as member.

People’s Small-Scale Mining Areas

RA 7076 authorizes the PMRB/CMRB to declare and set aside People’s Small-Scale Mining Areas in sites onshore suitable for small-scale mining subject to review by the Secretary thru the Director.

The following areas may be declared as People’s Small-Scale Mining Area:

• Areas already occupied and actively mined by Small-Scale Miners before August 1, 1987: Provided, that such areas are not considered as active mining areas: Provided, further, that the minerals found therein are technically and commercially suitable for small-scale mining activities: Provided, finally, that the areas are not covered by existing forest rights or reservations and have not been declared as tourist or marine reserves, parks and wildlife reservations, unless their status as such are withdrawn by competent authority;
• Public lands not subject to any existing right;
• Public lands covered by existing mining rights which are not active mining areas;
• Private lands, subject to certain rights and conditions, except those with substantial improvements or in bona fide and regular use as a yard, stockyard, garden, plant nursery, plantation, cemetery or burial site, or land situated within one hundred meters (100 meters) from such cemetery or burial site, water reservoir or a separate parcel of land with an area of ten thousand square meters (10,000 sq.m.) or less;
• Ancestral lands with prior consent from the cultural communities concerned. Provided, That the members of the cultural communities therein shall be given priority in the awarding of small-scale mining contracts;
• Areas occupied by a community of traditional small-scale miners subject to the approval of the said community.

Features of Small-Scale Mining Contracts

• Awarded to registered small-scale miners that have organized themselves into cooperatives;
• Maximum area of twenty (20) hectares;
• Has a term of two (2) years renewable for like periods;
• Issued by the Provincial Governor/City Mayor, upon the recommendation of the P/CMRB;
• May be entered into under any of the following modes of agreement ? Co-Production, Joint-Venture or Mineral Production Sharing Agreement;
• Ensures workers safety and health of small-scale miners; and
• Ensures the protection of the environment.

Provision on Worker Health and Safety

To ensure the safety and health of small-scale miners, the People’s Small-scale Mining Law requires small-scale mining contractors to:

• Provide for adequate sanitation facilities in the form of non-contaminating latrines;
• Provide for and maintain clean drinking water for all workers;
• Take responsibility for the health and safety of all individual contractors or employees operating within the contract area;
• Ensure that the use of mercury, cyanide or any other poisonous substance is handled in accordance with provisions directed by the DENR;
• Notify the PMRB/CMRB within five (5) working days of all accidents causing either death or more than 5 days of lost working time.

The DENR has also issued Administrative Order 97-30, providing in detail the safety rules and regulations governing the conduct of small-scale mining operations in the country. (Full text of the AO is contained on MGB’s Mineral Gazette Volume 1 No. 3 available at the MGB website: http://www.mgb.gov.ph.)

Provision on Protection of the Environment

In order to protect the surrounding environment of small-scale mining areas, the People’s Small-Scale Mining Law requires small-scale mining contractors to:

• Ensure that all areas of activity within the contract area are maintained in a clean and organized manner;
• Proceed with the schedule of tailings and waste management and mine site rehabilitation as documented in the approved Mining Plan;
• Take responsibility for the control and proper disposal, where applicable, of all wastes produced as a result of mining operations; and
• Comply with all environmental laws, especially with respect to water quality, water course diversion, excess siltation and undue interference with existing agricultural fishing and other legitimate land and water usage.

People’s Small-scale Mining Protection Fund

The People’s Small-Scale Mining Law established People’s Small-Scale Mining Protection Fund which provides that fifteen per cent (15%) of the national government’s share of the internal revenue tax or production share due the government shall be used primarily for information dissemination and training of small-scale miners on safety, health and environmental protection, and the establishment of Mine Rescue and Recovery Teams including the procurement of rescue equipment necessary in cases of emergencies such as landslides, tunnel collapse, or the like.

The Fund shall also be made available to address the needs of the small-scale miners brought about by accidents or fortuitous events.

The PMRB/CMRB shall act as trustee of the Fund.

Sale of Gold

The People’s Small-Scale Mining Law provides that all gold produced by small-scale miners in any mineralized area or mineral land shall be sold to the Bangko Sentral ng Pilipinas (for gold weighing 300 grams and above), or its duly authorized representatives (for gold weighing below 300 grams), at prices competitive with those prevailing in the world market regardless of volume or weight.