MiningBy: Mark Pasco

Objectives

Learn about the following:a. Mining industry in the Philippinesb. Legal policy and frameworksc. RA 7942 Philippine Mining Act of 1995d. Environmental laws and policies

applicable to mininge. Mining in Tampakanf. La Bugal B’laan Tribal Association Inc.,

et.al vs Ramos Case G.R. No 127882

Mining DefinitionThe process or business of extracting from the earth the precious or valuable metals, either in their native state or in their ores

Pros:• High paying jobs• Urbanization of the area• More taxes to the government

Cons:• Environmental degradation• Loss of wildlife habitat• Groundwater depletion

Mining in the PhilippinesThe Philippines has rich natural resources. It has one of the leading global reserves in minerals such as gold (Baguio, Masbate, Surigao), copper (Surigao), chromite (Zambales, Northern Luzon), nickel (Nonoc, Rio Tuba) among many others. The Philippine continue to be a major producer of gold and copper. In 1991 the nation was 13th in the world in copper production and 11th in gold production. To put in monetary value it would translate to Php 47 trillion

Legal Policy and FrameworkI. Spanish Royal Decree of 1837II. Philippine Bill of 1902III. Commonwealth Act of 137 (1936)IV. Presidential Decree No. 463 or the Mineral

Resource Development Decree of 1974 - PD 463 introduced the concept of 25-year mining leases and service contracts and was hailed as a “transition from passive to active, from historic to relatively modernized system of administration and disposition of mineral lands.” (Lopez, SP (1992) page 280)

Executive Order No. 279 (1989)

Article XII, Section 2 of the 1987 Constitution states that all lands of the public domain, minerals, coal and other natural resources are owned by the State.

Article II, Section 16 of the 1987 Constitution states the “right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.”

 EO 279 ushered the shift from leasehold system under PD 463 to production sharing agreement, co-production, joint venture and financial or technical assistance agreements with foreign owned corporations.

Republic Act 7942 or the Philippine Mining Act of 1995 (1995)

Initially called the Mineral Resources Development Act of 1988, the proposed mining policy was meant to achieve two primary tasks:

1. To revitalize the ailing Philippine mining industry by providing fiscal reforms and incentives and 2. To maintain a viable inventory of mineral reserves to sustain the industry through the fresh infusion of capital through direct foreign investments to finance mineral exploration and/or development activities.

Revised Implementing Rules and Regulations of RA 7942 (DENR Administrative Order No.96-40) - approved on December 19, 1996

International Environmental Laws

International agreements to which the Philippines is a party are part of the law of the land. They are thus subject to implementation with the same force and effect as domestic laws, and the Philippines is bound to perform the obligations imposed by these treaties.

a. Stockholm Declarationb. Rio Declarationc. UN Framework Convention on Climate Changed. Kyoto Protocol

Highlights of RA 7942Considered as one of the most socially and

environmentally sensitive legislation in its class wherein the provisions of this act take into consideration the following:

 ▫ Local government empowerment▫ Respect and concern for the indigenous cultural

communities▫ Equitable sharing of benefits of natural wealth▫ Economic demands of present generation while providing

the necessary foundation for the next generation▫ Worldwide trends towards globalization▫ Protection for and wise government of the environment

(Section 4 of RA 7942)

Ownership of Mineral Resources. ‑ Mineral resources are owned by the State and the exploration, development, utilization, and processing thereof shall be under its full control and supervision. The state may directly undertake such activities or it may enter into mineral agreements with contractors.

Declaration of Policy (Section 2 of DAO 96-40) All mineral resources are owned by the State.

The State shall promote the rational exploration, development, utilization and conservation.

The promotion shall be the combined efforts of the Government and private sector for the enhancement of national growth in a way that effectively safeguards the environment and protect the rights of affected communities.

Areas open to Mining Operations

Subject to any existing rights or reservations and prior agreements of all parties, all mineral resources in public or private lands, including timber or forestlands as defined in existing laws, shall be open to mineral agreements or financial or technical assistance agreement applications. Any conflict that may arise under this provision shall be heard and resolved by the panel of arbitrators.

Areas closed to Mining ApplicationsMineral agreement or financial or technical assistance

agreement applications shall not be allowed:

(a) In military and other government reservations, except upon prior written clearance by the government agency concerned;  

(b) Near or under public or private building, cemeteries, archeological and historic sites, bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public or private works including plantations or valuable crops, except upon written consent of the government agency or private entity concerned;

(c) In areas covered by valid and existing mining rights;

Areas closed to Mining Applications

(d) In areas expressedly prohibited by law;(e) In areas covered by small‑scale miners as defined by law

unless with prior consent of the small‑scale miners, in which case a royalty payment upon the utilization of minerals shall be agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development of the community concerned; and

(f) 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 the R.A. No. 7586, Department Administrative Order No. 25, series of 1992 and other laws.

Governing Principles(Section 3 of DAO 96-40)

Mineral resource exploration, development, utilization and conservation shall be governed by the principle of sustainable mining, which provides that the use of mineral wealth shall be pro-environment and pro-people in sustaining wealth creation and improved quality of life under the following terms:

Mining is a temporary land use for the creation of wealth, leading to an optimum land use in post-mining stage as consequence of progressive and engineered mine rehabilitation works done in cycle with mining operations; Mining activities must always be guided by current Best Practices in environmental management committed to reducing the impacts of mining while efficiently and effectively protecting the environment;

Governing Principles(Section 3 of DAO 96-40)

The wealth created as a result of mining accruing to the Government and the community should lead to other wealth-generating opportunities for people in the communities and for other environment-responsible endeavors.

Mining activities shall be undertaken with due and equal regard for economic and environmental considerations, as well as for health, safety, social and cultural concerns.

Conservation of minerals is effected not only through technological efficiencies of mining operations but also through the recycling of mineral-based products, to effectively lengthen the usable life of mineral commodities. 

The granting of mining rights shall harmonize existing activities, policies and programs of the Government that directly or indirectly promote self-reliance, development and resource management.

Different Types of Large Scale Mining Permits / Agreements under RA 7942

Role of LGU’sThe IRR highlights the role of LGU in mining projects, both as active beneficiaries and as active participants in mineral resources management, in consonance with the Constitution and government policies on local autonomy and empowerment. As such, the Mining Act provides the following:

 ▫ LGU’s have a share of 40% of the gross collection derived from the

National Government from mining taxes▫ In consonance with the Local Government Code and the People Small

Scale Mining Act (RA 7076), the LGU’s shall be responsible for the issuance of permits for small scale mining and quarrying operations, through the Provincial/City Mining Regulatory Board

▫ To actively participate in the process by which the communities shall reach an informed decision of the social acceptability of a mining project as a requisite for acquiring the Environmental Compliance Certificate

▫ To participate in the monitoring of mining activities as a member of the Multipartite Monitoring team

Ancestral Land and ICC AreasThe Mining Act fully recognizes the rights of Indigenous People/Indigenous Cultural Communities and respect their ancestral lands. Thus in Accordance with the DENR Administrative Order No 2, and consistent with the Indigenous Peoples Rights Act (IPRA), the following shall be observed:

▫ No mineral agreement, FTAA and mining permits shall be granted in ancestral lands/domains except with prior informed consent

▫ Where written consent is granted by the ICC’s , a royalty payment shall be negotiated which shall not be less than 1% of the total of the Gross output of the mining operations in the area

▫ Representation in the Multipartite Monitoring team

On Social and Community Development and Reasearch

Mining contractors/operators shall allocate a minimum of 1% of their direct mining and milling costs for the development of the following:

▫Construction and maintenance of structures such as roads, bridges, and other infrastructures

▫Mining technologies and geosciences

Ideal Mining Framework under the existing Mining Laws (Banaag 2000)

Relief for Environmental ViolationsPhilippine Mining Act of 1995

Section Violation Relief/ Penalty95 Failure of permittee or contractor to

comply with any of the requirements on the Act or IRR without a valid reason

Suspension of any permit or agreement provided under the act

96 Violation of terms and conditions of permits or agreements

Cancellation of permit or agreement

97 Failure to pay taxes and fees due to the Government for two (2) consecutive years

Cancellation of EP, MA, FTAA, and other agreements and Reopening of area to new applicants

98 Failure to abide by terms and conditions of tax incentive and credits

Suspension or cancellation of tax incentive and credit

99 False statements in EP, MA, and FTAA which may alter, change or affect substantially the facts set forth therein

Revocation and termination of permit or agreement

108 Violations of terms and conditions of ECC, which causes environmental damage through pollution

Imprisonment of six (6) months to six (6) years, or Fine of Fifty thousand d pesos (Php 50,000) to two hundred thousand pesos (Php 200,000), orBoth, at discretion of the court

110 Any other violation of the Act and IRR Fine not exceeding Five thousand pesos (Php 5,000)

Environmental Laws related to the mining sector1. Presidential Decree No. 3931 (June 18, 1964) National Water and Pollution Control Commission

2. Presidential Decree No. 984 (August 18, 1976) “The Pollution Control Law of 1976” declaring as a national policy the prevention, abatement and control pollution of water, air and land for the more effective utilization of the country’s resources

3. Presidential Decree No. 1151 (June 6, 1977) The “Philippine Environmental Policy” recognizes the submission of “Environmental Impact Assessment” studies

4. Presidential Decree No. 1152 (June 6, 1977) The “Philippine Environmental Code”

5. DENR Administrative Order No 52 series of 1989

Rules and regulations on the participation of non-governmental organizations in the DENR programs, particularly in natural resources development, conservation, management and protection and the enforcement of laws, rules and regulations for the sustainable development of the country’s remaining natural resources for the benefit and enjoyment of present and future generation of Filipinos

Mining in Tampakan

La Bugal B’laan Tribal Association Inc., et.al vs Ramos Gr. No 127882 January 2004

Background of the case:

RA 7942 took effect on April 9, 1995. Before the effectivity of RA 7942, on March 30, 1995 the President signed a FTAA with WMCP, a corporation organized in the Philippine laws, covering close to 100,000 hectares of land in several areas in Mindanao. Petitioners prayed that RA 7942, its implementing rules and the FTAA between the government and WMCP be declared unconstitutional on ground that they allow fully foreign owned corporations like WMCP to exploit, explore and develop Philippine mineral resources in contravention of Article XII Section 2.

In January 2001, WMC sold its wholes stake to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by IndoPhil.

La Bugal B’laan Tribal Association Inc., et.al vs Ramos Gr. No 127882 January 2004

Issues:▫ Whether or not the Philippine Mining Act is

unconstitutional for allowing a fully foreign-owned corporation to exploit Philippine Mineral Resources

▫ Whether or not the FTAA between the government and WMCP is a “service contract” that permits fully foreign owned companies to exploit Philippine resources

Held:a. RA 7942 is unconstitutional for permitting fully foreign

owned corporations to exploit Philippine natural resources Article XII Section 2 of the 1987 Constitution retained the

Regalian doctrine which set forth the unconstitutionality of RA 7942.

La Bugal B’laan Tribal Association Inc., et.al vs Ramos Gr. No 127882 January 2004

La Bugal B’laan Tribal Association Inc., et.al vs Ramos Gr. No 127882 December 2004

Background of the case:

La Bugal B’laan Tribal Association Inc., et.al vs Ramos Gr. No 127882 December 2004

References• Philippine Mining Act RA 7942• Legal Responses to the Environmental Impacts of Mining (Antonio

G.M. La Vina, Alaya M. de Leon, Gregorio Rafael P. Bueta)• Mining and Geosciences Bureau (www.mgb.gov.ph)• Department of Environment and Natural Resources (www.denr.gov.ph)• Sustainable Development in the Philippine Minerals Industry: A

baseline study (M.V. Cabalda, M.B. Banaag, P.N. T. Tidalgo, R. B. Garces, MGB Philippines, February 2002)

• All that glitters: Foreign Investment in Mining Trumps the Environment in the Philippines (Alan Khee-Jin Tan, January 2006)

• Sagittarius Mines Inc (http://www.smi.com.ph/EN/Pages/Home.aspx)• IndoPhil Resources (http://www.indophil.com/)• http://ustlawreview.com/pdf/vol.XLIX/Cases/La_Bugal_Blaan_v._Ramos.

pdf• http://ustlawreview.com/pdf/vol.XLIX/Cases/La_Bugal_Blaan_%20v._Ra

mos_II.pdf• Philippines: Mining or Food? (Robert Goodland and Clive Wicks, 2001)