September 19, 2003
SUBJECT : AMENDMENTS TO DENR ADMINISTRATIVE ORDER NO. 96-40, AS AMENDED,
OR THE “REVISED IMPLEMENTING RULES AND
REGULATIONS OF REPUBLIC ACT NO. 7942, OTHERWISE KNOWN AS THE ‘PHILIPPINE MINING
ACT OF 1995’ ”
Pursuant to Section 8 of Republic Act No. 7942, otherwise
known as the “Philippine Mining Act of 1995” and Section 275 of DENR
Administrative Order (DAO) No. 96-40, the Revised
Implementing Rules and Regulations of Republic Act No. 7942, as amended, and in
line with the policy of the Government to continuously provide for a responsive
regulatory framework, DAO No. 96-40, as amended by DAO Nos. 99-57, 2000-61 and
2000-99, is further revised as follows:
Section
1. Section 11 (Mining Operations
within Mineral and Government Reservations) is hereby amended, to read as
follows:
“Mining operations in Mineral Reservations
shall be undertaken by the Department or through a Qualified Person under any
of the following modes:
a. Exploration Permit;
b. Mineral Agreement;
c. Financial or Technical Assistance
Agreement (FTAA);
d. Small-Scale Mining Permit; and
e. Quarry Permit.
In
cases where the mining operations shall be directly undertaken by the
Department, a Memorandum of Agreement may be entered into by and between the
Department and a qualified government corporation/ entity authorizing the
latter to explore, develop and/or utilize the minerals resources found therein.
Mining
operations in Government Reservations shall be first undertaken through an
Exploration Permit, subject to limitations prescribed therein, before the same
is opened for Mineral Agreement/ FTAA application or other mining applications.
Applications
for Exploration Permit/Mineral Agreement/FTAA within Mineral Reservations shall
be filed in the Regional Office concerned for its initial evaluation and
endorsement to the Bureau for final evaluation. In the event that the applied area covers both a Mineral
Reservation and a non-Mineral Reservation, the mining applicant may file
separate applications covering the Mineral Reservation area and the non-Mineral
Reservation area, or file a single application covering the whole area, in the
Regional Office concerned.
Application
for Exploration Permit/Mineral Agreement/FTAA/Quarry Permit within Mineral and
Government Reservations shall be governed by other applicable provisions
of Chapters V, VI, VII and VIII of these implementing rules and
regulations.”
Section 2. Section
17 (General Provisions) is hereby amended, to read as follows:
“Exploration
activities may be directly undertaken by the Bureau or on behalf of the
Contractor subject to reimbursement of all expenditures. In the event that the Bureau can not
undertake such exploration activities, the same may be undertaken by a Qualified
Person in specified areas as determined by the Director.
In cases where the
Regional Office concerned/Bureau deems it necessary to undertake an immediate
technical study of an area, it may enter into a Memorandum of Agreement (MOA)
with an EP applicant to jointly undertake such study for a period of six (6)
months. The conduct of sub-surface
exploration activities shall be strictly prohibited under the MOA.”
Section
3. Section 22 (Terms and Conditions
of an Exploration Permit), as amended, is hereby further amended to read as
follows:
“An
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) within the subject area;
b. The Permit shall be for the exclusive
use and benefit of the Permittee or its duly authorized representative and,
shall under no circumstances, be used by the Permittee for purposes other than
exploration;
c. The term of the Permit shall be for a
period of two (2) years from date of issuance thereof, renewable for like
periods but not to exceed a total term of six (6) years for nonmetallic minerals exploration or eight (8) years for
metallic minerals exploration: Provided,
That no renewal of Permit shall be allowed unless the Permittee has complied
with the terms and conditions of the Permit and has not been found guilty of
violation of any provision of the Act and these implementing rules and
regulations. In cases where further
exploration is warranted beyond
the six (6)- or eight (8)-year period and on condition that the
Permittee has substantially implemented the Exploration and Environmental Work
Programs as verified by the Bureau, the Secretary, through the Director, may further grant renewal of the
Exploration Permit: Provided, That the Permittee shall be required to set
up a performance surety equivalent to the expenditure requirement of the
Exploration and Environmental Work Programs. The conduct of feasibility studies
shall be included during the term of the Exploration Permit;
d. The
Permittee shall submit to the Bureau/ Regional Office concerned within
thirty (30) calendar days after the end of each semester a report under oath of
the Exploration Work Program implementation and expenditures showing
discrepancies/deviations including the results of the survey, laboratory
reports, geological reports/maps subject to semiannual inspection and
verification by the Bureau/Regional Office concerned at the
expense of the Permittee: Provided,
That any expenditure in excess of the yearly budget of the approved Exploration
Work Program may be carried forward and credited to the succeeding years
covering the duration of the Permit;
e. The Permittee shall submit to the
Bureau/Regional Office concerned within thirty (30) calendar days
from the end of six (6) months after the approval of the Environmental Work
Program (EWP) and every six (6) months thereafter a status report on its
compliance with the said EWP;
f. The Permittee shall annually
relinquish at least 20% of the permit area during the first two (2) years of
exploration and at least 10% of the remaining permit area annually during the
extended exploration period. However,
if the permit area is less than five thousand (5,000) hectares, the Permittee
need not relinquish any part thereof. A
separate report of relinquishment shall be submitted to the Bureau/Regional
Office concerned with a detailed geologic report of the
relinquished area accompanied by maps at a scale of 1:50,000 and results of
analyses and corresponding expenditures, among others. The minimum exploration
expenditures for the remaining area after relinquishment shall be based on the
approved Exploration Work Program;
g. The Secretary or his/her duly
authorized representative shall annually review the performance of the
Permittee;
h. The Permittee shall submit to the
Bureau/Regional Office concerned a final report upon the
expiration or relinquishment of the Permit or its conversion into Mineral
Agreement or FTAA in a form and substance comparable to published reports of
respected international organizations and shall incorporate all the findings in
the permit area, including locations of samples, assays, chemical analyses and
assessment of the mineral potential. Such
report shall include complete detailed expenditures incurred during the
exploration;
i. In case of diamond drilling, the
Permittee shall, upon request of the Director/Regional Director concerned,
submit to the Bureau/ Regional Office concerned a quarter of the core
samples which shall be deposited in the Bureau/Regional Office Core Library concerned
for reference and safekeeping;
j. Offshore exploration activities shall
be carried out in accordance with the United Nations Convention on the Law of
the Sea (UNCLOS) and in a manner that will not adversely affect the safety of
navigation at sea and will ensure accommodation with other marine activities
such as fishing, aquaculture, transportation, etc.;
k. Onshore exploration activities shall be
carried out in a manner that will, at all times, safeguard the environment;
l. If the Permittee applies for a Mineral
Agreement or FTAA over the permit area, the exploration period covered by the Exploration
Permit shall be considered as the exploration period of the Mineral Agreement
or FTAA;
m. The Permittee shall comply with
pertinent provisions of the Act and these implementing rules and regulations;
and
n. Other terms and conditions which the
Bureau/Regional Office concerned may deem appropriate.”
Section
4. Section 27 (Renewal of
Exploration Permit) is hereby amended, to read as follows:
“Prior
to the expiration of an Exploration Permit, the Permittee may
submit to the Bureau, copy furnished the Regional Office concerned,
an application to renew the Exploration Permit accompanied by five (5) sets of
the following mandatory requirements:
a. Justification
of renewal;
b. Comprehensive
technical reports on the outcome of the two-year Exploration and
Environmental Work Programs, signed by a licensed Mining Engineer or
Geologist and an Environmental Officer, respectively;
c. Audited
financial statements covering the term of the Exploration Permit;
d. Two
(2)-year Exploration Work Program (MGB Form No. 5-4) duly prepared, signed and
sealed by a licensed Mining Engineer or Geologist;
e. Environmental
Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A),
f. Certification
by the Regional Office concerned as to the compliance of the Permittee with the
terms and conditions of the Exploration Permit; and
g. Other supporting papers as the Bureau may require.
The
Secretary, through the Director, may grant the renewal after
field verification by the Bureau, which shall be undertaken at the
expense of the Permittee, and compliance with all pertinent
requirements.”
Section
5. Section 35 (Mandatory
Requirements for Mineral Agreement Application) is hereby amended, to read as
follows:
“The
applicant shall submit at least five (5) sets of the following mandatory
requirements depending on the type of agreement applied for:
a. For
individuals –
1. Location
map/sketch plan of the proposed contract area showing its geographic
coordinates/meridional block(s) and boundaries in relation to major
environmental features and other projects using NAMRIA topographic map in a
scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic
Engineer;
2. Two-year
Exploration Work Program (MGB Form No. 5-4) or three-year
Development/Utilization Work Program (MGB Form No. 6-2), as deemed applicable,
duly prepared, signed and sealed by a licensed Mining Engineer, Geologist or
Metallurgical Engineer;
3. When
applicable, a satisfactory Environmental Management Record and Community
Relations Record as determined by the Bureau in consultation with the
Environmental Management Bureau and/or the Department Regional Office. The detailed guidelines for the
determination and applicability of such records shall be specified by the
Secretary upon the recommendation of the Director;
4. Environmental
Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A) during the exploration
period as provided for in Section 168 hereof or Environmental Compliance
Certificate prior to development, construction and/or utilization and
Environmental Protection and Enhancement Program (MGB Form No. 16-2) as
provided for in Section 169 hereof;
5. Proof of
technical competence including, among others, curricula vitae and track records
in mining operations and environmental management of the technical personnel
who shall undertake the activities in accordance with the submitted
Exploration/Development/Utilization Work Program and Environmental
Work/Environmental Protection and Enhancement Program, as deemed applicable;
6. Proof of
financial capability to undertake the activities pursuant to
Exploration/Development/Utilization Work Program and Environmental Work/
Environmental Protection and Enhancement Program, as deemed applicable, such as
statement of assets and liabilities duly sworn in accordance with existing
laws, credit lines and income tax return for the preceding year;
7. Declaration
of the total area covered by approved/pending Mineral Agreement(s)/
application(s); and
8. Other
supporting papers as the Department/Bureau/Regional Office concerned
may require or the applicant may submit.
b. For
corporations, partnerships, associations or cooperatives -
1. Duly
certified Certificate of Registration issued by the Securities and Exchange Commission
or authorized Government agency concerned;
2. Duly
certified Articles of Incorporation/ Partnership/Association and By-Laws;
3. Location
map/sketch plan of the proposed contract area showing its geographic
coordinates/meridional block(s) and boundaries in relation to major
environmental features and other projects using NAMRIA topographic map in a
scale of 1:50,000 duly prepared, signed and sealed by a deputized Geodetic
Engineer;
4. Two-year
Exploration Work Program (MGB Form No. 5-4) or three-year
Development/Utilization Work Program (MGB Form No. 6-2), as deemed applicable,
duly prepared, signed and sealed by a licensed Mining Engineer, Geologist or
Metallurgical Engineer;
5. When
applicable, a satisfactory Environmental Management Record and Community
Relations Record as determined by the Bureau in consultation with the
Environmental Management Bureau and/or the Department Regional Office. The detailed guidelines for the
determination and applicability of such records shall be specified by the
Secretary upon the recommendation of the Director;
6. Environmental
Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A) during the exploration
period as provided for in Section 168 hereof or Environmental Compliance
Certificate prior to development, construction and/or utilization and
Environmental Protection and Enhancement Program (MGB Form No. 16-2) as
provided for in Section 169 hereof;
7. Proof of
technical competence including, among others, curricula vitae and track records
in mining operations and environmental management of the technical personnel
who shall undertake the activities in accordance with the submitted
Exploration/Development/Utilization Work Program and Environmental Work/
Environmental Protection and Enhancement Program, as deemed applicable;
8. Proof of
financial capability to undertake the activities pursuant to Exploration/
Development/Utilization Work Program and Environmental Work/Environmental
Protection and Enhancement Program, as deemed applicable, such as latest Audited
Financial Statement and where applicable, Annual Report for the preceding year,
credit lines, bank guarantees and/or similar negotiable instruments;
9. Declaration
of the total area covered by approved/pending Mineral Agreement(s)/
application(s); and
10. Other
supporting papers as the Department/Bureau/Regional Office concerned
may require or the applicant may submit.
If
the applicant conducts or has conducted mining operations in a foreign
country(ies), the Department shall verify the relevant requirements through the
Philippine Embassy(ies) or Consulate(s) based in such country(ies).
c. For holders of valid and existing
mining lease contracts, operating agreements, Quarry Permits/licenses or
unperfected mining/quarry claims, the following shall be submitted in addition
to the aforesaid requirements, whenever applicable, namely:
1. Certification from the Regional Office concerned
that the mining/quarry claims are valid and subsisting;
2. Appropriate environmental report on the
rehabilitation of mined-out and/or mine waste/tailings-covered areas and
anti-pollution measures undertaken during the mining operations;
3. Environmental Compliance Certificate
for any new phase outside of the originally approved operation under the mining
project;
4. Mining Project Feasibility Study (MGB
Form No. 5-3): Provided, That a Mineral Agreement applicant with existing
mining operation may submit, in lieu of the Mining Project Feasibility Study, a
Project Description and a detailed financial statement of its operations
incorporating therein the social and environmental expenditures, taxes and fees
paid (MGB Form No. 5-3A);
5. Three-year
Development/Construction/Utilization Work Program (MGB Form No. 6-2), as deemed
applicable, duly prepared, signed and sealed by a licensed Mining Engineer,
Geologist or Metallurgical Engineer;
6. Approved Survey Plan of the mining
area; and
7. Other supporting papers as the
Department/Bureau/Regional Office concerned may require or the
applicant may submit.”
Section
6. Section 39 (Terms and Conditions
of a Mineral Agreement), as amended, is hereby further amended, to read as
follows:
“The
following terms and conditions shall be incorporated in the Mineral Agreement:
a. A
stipulation that the Contractor shall not, by virtue of the Mineral Agreement,
acquire any title over the contract/mining area without prejudice to the
acquisition by the Contractor of the land/surface rights through any mode of
acquisition provided for by law;
b. Representations and warranties that the
Contractor has, or has access to, all the financing and technical capability
and technology required to promptly and effectively carry out the objectives of
the Agreement with the understanding to timely utilize these resources under
its supervision pursuant to the periodic work programs and related budgets, and
when proper, providing an exploration period up to two (2) years from date of
issuance thereof, renewable for like periods but not to exceed a total term of
six (6) years for nonmetallic minerals exploration or eight (8) years for metallic
minerals exploration, subject to annual review and approval by the Director in
accordance with these implementing rules and regulations. In cases where further
exploration is warranted beyond the six (6)- or eight (8)-year period and on condition that the Contractor has substantially implemented the
Exploration and Environmental Work Programs as verified by the Bureau, the Director may further grant
renewal of the Exploration Period: Provided, That the Contractor shall be required to set up a performance surety
equivalent to the expenditure requirement of the Exploration and Environmental
Work Programs. The conduct of feasibility studies shall be included during the
term of the Exploration Period. The
Contractor shall file in the Regional Office concerned the Declaration of
Mining Project Feasibility within the term of the Exploration Period.
In case the Contractor opts for a renewal of
its Exploration Period, it shall file, prior to the expiration, a renewal
application in the Bureau, copy furnished the Regional Office concerned,
accompanied by the following mandatory requirements:
i. Justification
of renewal;
ii. Comprehensive
technical reports on the outcome of the two (2)-year Exploration and
Environmental Work Programs, signed by a licensed Mining Engineer or Geologist
and an Environmental Officer, respectively;
iii. Audited
financial statements covering the term of the Exploration Period;
iv. Two
(2)-year Exploration Work Program (MGB Form No. 5-4) duly prepared, signed and
sealed by a licensed Mining Engineer or Geologist;
v. Environmental
Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A);
vi. Certification by the Regional Office concerned as to the
compliance of the Contractor with the terms and conditions of the Mineral
Agreement during the Exploration Period; and
vii. Other
supporting papers as the Bureau may require.
c. Representations
and warranties that the applicant has all the qualifications and none of the
disqualifications for entering into the Agreement;
d. A
stipulation that the Contractor may relinquish totally or partially the
original contract area during the exploration period. After the exploration period and prior to or upon approval of
Declaration of Mining Project Feasibility by
the Director, the Contractor shall finally relinquish to the Government any
portion of the contract area which shall not be necessary for mining operations
and not covered by any declaration of mining feasibility with the corresponding
submission to the Bureau/Regional Office concerned of geologic
report and pertinent maps in the scale of 1:50,000. The minimum exploration expenditures for the remaining area after
relinquishment shall be based on the approved Exploration Work Program;
e. A
stipulation that each mining area after final relinquishment shall not be more
than five thousand (5,000) hectares for metallic minerals and two thousand
(2,000) hectares for nonmetallic minerals: Provided,
That the Director, with the approval of the Secretary, may allow a Contractor
to hold a larger mining area depending upon the nature of the deposit subject
to technical verification and evaluation by the Bureau as to the
technical/financial capability of the Contractor;
f. A
stipulation that the mining operations shall be conducted in accordance with
the provisions of the Act and these implementing rules and regulations;
g. A
stipulation that the Contractor shall give preference to goods and services
produced and offered in the Philippines of comparative quality and cost. In particular, the Contractor shall give
preference to qualified Filipino construction enterprises, construction
materials and skills available in the Philippines, Filipino sub-contractors for
road construction and transportation, and Philippine household equipment,
furniture and food;
h. A
stipulation that the Contractor is obliged to give preference to Filipinos in
all types of mining employment for which they are qualified and that the technology
shall be transferred to the same;
i. A
stipulation that the Contractor shall not discriminate on the basis of gender
and that the Contractor shall respect the right of women workers to participate
in policy and decision-making processes affecting their rights and benefits;
j. A
stipulation requiring the Contractor to effectively use the best available
appropriate anti-pollution technology and facilities to protect the environment
and to restore or rehabilitate mined-out areas and other areas affected by mine
waste/mill tailings and other forms of pollution or destruction in compliance
with the requirements of the ECC and P.D. No. 984. This should be undertaken in coordination with the EMB/
Department Regional Office;
k. A
stipulation that the Contractor shall furnish the Government an annual report
of its mining operations and records of geologic, accounting and other relevant
data, and that book of accounts and records shall be open for inspection by the
Government;
l. A
stipulation requiring the Contractor to dispose of the minerals and by-products
produced at the highest market price and to negotiate for more advantageous
terms and conditions subject to the right to enter into long-term sales or
marketing contracts or foreign exchange and commodity hedging contracts which
the Government acknowledges to be acceptable notwithstanding that the sale
price of the minerals may from time to time be lower, or the terms and
conditions of sales are less favorable, than that available elsewhere: Provided, That the Bureau is furnished a
copy of the said Sales Agreement subject to confidentiality between the Bureau
and the Contractor;
m. A
stipulation providing for consultation and arbitration with respect to the
interpretation and implementation of the terms and conditions of the Agreement;
n. A
stipulation that the Contractor shall pay fees, taxes, royalties and other
obligations in accordance with existing laws, rules and regulations;
o. A
stipulation that alien employment shall be limited to technologies requiring
highly specialized training and experience subject to the required approval
under existing laws, rules and regulations;
p. A
stipulation that in every case where foreign technologies are utilized and
where alien executives are employed, an effective program of training
understudies shall be undertaken;
q. A
stipulation that the Contractor shall conform with laws, rules and regulations
regarding, among others, labor, safety and health standards;
r. A
stipulation that the Contractor shall confine its mining operations to its
contract/mining area and that it shall not interfere with the rights of other
Contractors/Lessees/operators/Permittees/Permit Holders;
s. A
stipulation that the Contractor shall recognize and respect the rights, customs
and traditions of local communities, particularly Indigenous Cultural
Communities;
t. A
stipulation that the Contractor shall contribute to the development of the host
and neighboring communities of the mining area, local geoscience and mining
technology in accordance with Chapter XIV hereof;
u. A
stipulation that the Contractor shall comply with its obligations under its
Environmental Protection and Enhancement Program (EPEP) and its Annual EPEP,
including the allocation of the prescribed annual environmental expense
pursuant to Section 171 hereof;
v. A
stipulation that the Contractor shall utilize the best available appropriate
and efficient mining and processing technologies;
w. A
stipulation that the Contractor shall undertake exploration work on the area as
specified in its Agreement based on an approved Work Program: Provided, That a negative variance of at
least twenty percent (20%) in the Work Program and corresponding expenditures
shall be subject to approval of the Director/Regional Director concerned;
x. A
stipulation that the Contractor shall submit annually starting from the date of
approval of the Agreement, progress reports of the exploration activities in
the prescribed form. This shall be
accompanied by raw geologic, geophysical and geochemical data plotted in a
1:50,000 scale map, at a minimum. A
quarterly report containing activities and accomplishments for each quarter
shall also be submitted. At the end of
the exploration term, the Contractor shall submit the final report with the
detailed list of activities with the corresponding expenditures. The final report shall be accompanied by a
1:50,000 geologic map of the contract area acceptable by international
standards. All reports referred to
herein shall be submitted to the Bureau/Regional Office concerned;
y. A
stipulation that the Mineral Agreement shall be canceled, revoked or terminated
for failure of the Contractor to comply with the terms and conditions thereof
or for other grounds as provided for in Section 230 hereof;
z. A stipulation that the
withdrawal by the Contractor from the Mineral Agreement shall not release it
from any and all financial, environmental, legal and fiscal obligations under
the Agreement;
aa. A stipulation that a financing
institution that has granted a loan to the Contractor for the mining project
shall have the authority to designate its assignee of the Mineral Agreement in
case of the Contractor’s default from such loan: Provided, That the assignee is
a Qualified Person and the assignment shall be subject to approval by the
Secretary; and
ab. Such
other terms and conditions not inconsistent with the Constitution, the Act and
these implementing rules and regulations, as well as those which the Secretary
may deem to be for the national interest and public welfare.
The
Department shall formulate and promulgate such other rules, regulations and
guidelines necessary to ensure compliance with the terms and conditions
herein.”
Section 7. Section 41 (Evaluation of Mineral
Agreement Application) is hereby amended to read as follows:
“Within
fifteen (15) working days from receipt of the Certification issued by the Panel
of Arbitrators as provided for in Section 38 hereof, the Regional Director concerned
shall initially evaluate the Mineral Agreement applications in areas outside
Mineral Reservations. He/She shall
thereafter endorse his/her findings to the Bureau for further evaluation by the
Director within fifteen (15) working days from receipt of forwarded documents. Thereafter, the Director shall endorse the same
to the Secretary for consideration/approval within fifteen (15) working days
from receipt of such endorsement: Provided,
That any application for Mineral Agreement shall be deemed approved if not
acted upon by the Secretary within thirty (30) calendar days from official
receipt thereof: Provided, further, That the Secretary shall, within five (5)
days thereafter, sign all the pertinent documents for the approval of the said
application.
In case of
Mineral Agreement applications in areas within Mineral Reservations, within
fifteen (15) working days from receipt of the Certification issued by the Panel
of Arbitrators as provided for in Section 38 hereof, the same shall be
evaluated and endorsed by the Director to the Secretary for
consideration/approval within fifteen (15) working days from receipt of such
endorsement: Provided, That any
application for Mineral Agreement shall be deemed approved if not acted upon by
the Secretary within thirty (30) calendar days from official receipt thereof:
Provided, further, That the Secretary shall, within five (5) days thereafter,
sign all the pertinent documents for the approval of the said application.”
Section
8. Section 52 (Term of an FTAA) is
hereby amended to read as follows:
“An FTAA
shall have a term not exceeding twenty-five (25) years from the date of
execution thereof, and renewable for another term not exceeding twenty-five
(25) years under such terms and conditions as may be provided for by law and
mutually agreed upon by the parties.
The activities of each phase of mining operations must be completed
within the following periods:
a. Exploration - up to two (2) years from
date of FTAA execution, extendible for another two (2) years subject to the
following requirements:
1. Justification
of renewal;
2. Comprehensive
technical reports on the outcome of the two (2)-year Exploration and
Environmental Work Programs, signed by a licensed Mining Engineer or
Geologist and an Environmental Officer, respectively;
3. Audited financial
statements covering the term of the Exploration Period;
4. Two
(2)-year Exploration Work Program (MGB Form No. 5-4) duly prepared,
signed and sealed by a licensed Mining Engineer or Geologist;
5. Environmental
Work Program (MGB Form No. 16-1 or MGB Form No. 16-1A);
6. Relinquishment
report; and
7. Other supporting papers as the
Department/Bureau/Regional Office concerned may require.
In case the Contractor opts for a renewal of its
Exploration Period, it shall file prior to the expiration of the Exploration
Period a renewal application to the Bureau, copy furnished the Regional Office
concerned, accompanied by the above requirements.
b. Pre-feasibility
study, if warranted - up to two (2) years from expiration of the exploration
period;
c. Feasibility
study - up to two (2) years from the expiration of the
exploration/pre-feasibility study period or from declaration of mining project
feasibility; and
d. Development,
construction and utilization - remaining years of FTAA.
Any two
(2) or more of the above periods may be simultaneously undertaken in one
approved contract area, as the need of the Contractor may arise, subject to the
pertinent provisions of Section 59 hereof.”
Section 9. Section 56 (Terms and Conditions of an
FTAA) is hereby amended, to read as follows:
“The following terms, conditions and warranties shall be
incorporated in the FTAA, namely:
a. A firm
commitment, in the form of a sworn statement during the existence of the
Agreement, that the Contractor shall comply with minimum ground expenditures
during the exploration and pre-feasibility periods as follows:
Year US $/Hectare
1 2
2 2
3 8
4 8
5 18
6 23
and
a minimum investment of Fifty Million US Dollars ($50,000,000.00) or its Philippine
Peso equivalent in the case of Filipino Contractor for infrastructure and
development in the contract area. If a
Temporary/Special Exploration Permit has been issued prior to the approval of
an FTAA, the exploration expenditures incurred shall form part of the
expenditures during the first year of the exploration period of the FTAA.
In
the event that the Contractor exceeds the minimum expenditure requirement in
any one (1) year, the amount in excess may be carried forward and deducted from
the minimum expenditure required in the subsequent year. In case the minimum ground expenditure
commitment for a given year is not met for justifiable reasons as determined by
the Bureau/Regional Office concerned, the unexpended amount may
be spent on the subsequent year(s) of the exploration period.
b. A
stipulation that the Contractor shall not, by virtue of the FTAA, acquire any
title over the contract/mining area without prejudice to the acquisition by the
Contractor of the land/surface rights through any mode of acquisition provided
for by law;
c. Representations
and warranties that the Contractor has, or has access to, all the financing,
managerial and technical capability and technology required to promptly and
effectively carry out the objectives of the Agreement with the understanding to
timely utilize these resources under its supervision pursuant to the periodic
work programs and related budgets, and when proper, providing an exploration
period up to two (2) years, extendible for another two (2) years, subject to
annual review by the Secretary in accordance with these implementing rules and
regulations;
d. Representations
and warranties that the applicant has all the qualifications and none of the
disqualifications for entering into the Agreement;
e. A
stipulation that the Contractor shall relinquish its contract area pursuant to
Section 60 hereof;
f. Representations
and warranties that, except for payments for dispositions for its equity,
foreign investments in local enterprises which are qualified for repatriation,
and local supplier's credits and such other generally accepted and permissible
financial schemes for raising funds for valid business purposes, the Contractor
shall not raise any form of financing from domestic sources of funds, whether in
Philippine or foreign currency, for conducting its mining operations for and in
the contract/mining area;
g. A
stipulation that the mining operations shall be conducted in accordance with
the provisions of the Act and these implementing rules and regulations;
h. A
stipulation that the Contractor shall perform its activities within the periods
expressed in the FTAA plans and work programs, save as may be excused by force
majeure;
i. A
stipulation that the Contractor shall give preference to goods and services
produced and offered in the Philippines of comparative quality and cost. In particular, the Contractor shall give
preference to qualified Filipino construction enterprises, construction
materials and skills available in the Philippines, Filipino sub-contractors for
road construction and transportation and Philippine household equipment,
furniture and food;
j. A
stipulation that the Contractor is obliged to give preference to Filipinos in
all types of mining employment for which they are qualified and that the
technology shall be transferred to the same;
k. A
stipulation that the Contractor shall not discriminate on the basis of gender
and that the Contractor shall respect the right of women workers to participate
in policy and decision-making processes affecting their rights and benefits;
l. A
stipulation requiring the Contractor to effectively use the best available
appropriate anti-pollution technology and facilities to protect the environment
and to restore or rehabilitate mined-out areas and other areas affected by mine
waste/mill tailings and other forms of pollution or destruction in compliance
with the requirements of the ECC and P.D. No. 984. This should be undertaken in coordination with the EMB/Department
Regional Office;
m. A
stipulation that the Contractor shall furnish the Government an annual report
of its mining operations and records of geologic, accounting and other relevant
data, and that book of accounts and records shall be open for inspection by the
Government;
n. A
stipulation requiring the Contractor to dispose of the minerals and by-products
produced at the highest market price and to negotiate for more advantageous
terms and conditions subject to the right to enter into long-term sales or
marketing contracts or foreign exchange and commodity hedging contracts which
the Government acknowledges to be acceptable notwithstanding that the sale
price of the minerals may from time to time be lower, or the terms and
conditions of sales are less favorable, than that available elsewhere: Provided, That the Bureau is furnished a
copy of the said Sale Agreement subject to confidentiality between the Bureau
and the Contractor;
o. A
stipulation providing for consultation and arbitration with respect to the
interpretation and implementation of the terms and conditions of the Agreement;
p. A
stipulation that the Contractor shall pay fees, taxes, royalties, shares and
other obligations in accordance with existing laws, rules and regulations;
q. A
stipulation that alien employment shall be limited to technologies requiring
highly specialized training and experience subject to the required approval
under existing laws, rules and regulations;
r. A
stipulation that in every case where foreign technologies are utilized and
where alien executives are employed, an effective program of training
understudies shall be undertaken;
s. A
stipulation that the Contractor shall conform with laws, rules and regulations
regarding, among others, labor, safety and health standards:
t. A
stipulation that the Contractor shall confine its mining operations to its
contract/mining area and that it shall not interfere with the rights of other
Contractors/Lessees/operators/Permittees/Permit Holders;
u. A
stipulation that the Contractor shall recognize and respect the rights, customs
and traditions of local communities, particularly Indigenous Cultural
Communities;
v. A
stipulation that the Contractor shall contribute to the development of the host
and neighboring communities of the mining area, local geoscience and mining
technology in accordance with Chapter XIV hereof;
w. A
stipulation that the Contractor shall comply with its obligations under its
Environmental Protection and Enhancement Program (EPEP) and its Annual EPEP, including
the allocation of the prescribed annual environmental expense pursuant to
Section 171 hereof;
x. A
stipulation that the Contractor shall utilize the best available appropriate
and efficient mining and processing technologies;
y. A
stipulation that the Contractor shall undertake exploration work on the area as
specified in its Agreement based on an approved Work Program: Provided, That a negative variance of at
least twenty percent (20%) in the Work Program and corresponding expenditures
shall be subject to approval of the Director/Regional Director concerned;
z. A
stipulation that the Contractor shall submit annually starting from the date of
approval of the Agreement, progress reports of the exploration activities in
the prescribed form. This shall be
accompanied by raw geologic, geophysical and geochemical data plotted in a
1:50,000 scale map, at a minimum. A
quarterly report containing activities and accomplishments for each quarter
shall also be submitted. At the end of
the exploration term, the Contractor shall submit the final report with the
detailed list of activities with the corresponding expenditures. The final report shall be accompanied by a
1:50,000 geologic map of the contract area acceptable by international
standards. All reports referred to
herein shall be submitted to the Bureau/Regional Office concerned;
aa. A
stipulation that the FTAA shall be canceled, revoked or terminated for failure
of the Contractor to comply with the terms and conditions thereof or for other
grounds as provided for in Section 230 hereof.
Should
an FTAA be canceled, revoked or terminated, it shall no longer be required to
meet the minimum expenditure requirement for the remaining period: Provided, That such cancellation,
revocation or termination is in accordance with Section 68 hereof.
ab. A
stipulation that withdrawal by the Contractor from the FTAA shall not release
it from any and all financial, environmental, legal and/or fiscal obligations
including settlement of all obligations that should have accrued to the
Government during the term of the FTAA;
ac. A
stipulation that a financing institution that has granted a loan to the
Contractor for the mining project shall have the authority to designate its
assignee of the FTAA in case of the Contractor’s default from such loan:
Provided, That the assignee is a Qualified Person and the assignment shall be
subject to prior approval by the President;
ad. A
stipulation that the Contractor shall comply with all other applicable
provisions of the Act and these implementing rules and regulations; and
ae. Such other
terms and conditions not inconsistent with the Constitution, the Act and these
implementing rules and regulations, as well as those which the Secretary may
deem to be for the national interest and public welfare.
The
Department shall formulate and promulgate such other rules, regulations and
guidelines necessary to ensure compliance with the terms and conditions herein
stated and to establish a fixed and stable fiscal regime with respect to FTAAs.”
Section 10.