QuestionsQuestions (DENR ADMINISTRATIVE ORDER NO. 2005-07)
The CLRF is an environmental guarantee fund mechanism institutionalized by the Department through the Bureau. Under DAO 2005-07, it is in the form of three components: (1) the Mine Rehabilitation Fund (MRF), (2) Mine Waste and Tailings Fees, and (3) the Final Mine Rehabilitation and Decommissioning Fund (FMRDF).
Each operating Contractor/Permit Holder is required to establish and maintain an MRF as a reasonable environmental deposit to ensure funds are available for satisfactory compliance with commitments and performance stated in the EPEP/AEPEP during specific project phases.
The MRF has two forms: (a) Monitoring Trust Fund (MTF), initiated by the Contractor/Permit Holder to fund the approved monitoring program; it is used exclusively for monitoring expenses under the MRF Committee-approved program. (b) Rehabilitation Cash Fund (RCF), set up for compliance with approved rehabilitation activities and schedules including research programs; it is used for implementing EPEP/AEPEP rehabilitation commitments.
The MTF amount is determined by the MRF Committee but shall not be less than ₱150,000. The Secretary may authorize an increase upon recommendation of the Director when national interest and public welfare require it.
The RCF is equivalent to ten percent (10%) of the total amount needed to implement the EPEP, or ₱5,000,000, whichever is lower. It must be deposited in four (4) equal quarterly deposits within fifteen (15) calendar days from the beginning of each quarter of the first year following the approval of the EPEP.
After payment of all outstanding obligations, the RCF (including interests) is terminated and the remaining amount is returned to the Contractor/Permit Holder. In lieu of the RCF, the Final Mine Rehabilitation and Decommissioning Fund (FMRDF) is utilized to fund decommissioning and/or rehabilitation activities contained in the approved Final Mine Rehabilitation and/or Decommissioning Plan (FMR/DP) for succeeding years until mine-closure objectives are achieved.
Among others: evaluate and approve/disapprove EPEPs/AEPEPs for certain permits; manage, operate, monitor and ensure safety of MRFs/FMRDFs; resolve progressive rehabilitation issues; hire independent experts; ensure strict implementation of approved EPEPs/AEPEPs; deputize Multipartite Monitoring Teams (MMTs); monitor MMTs and report to the CLRF Steering Committee; and ensure separate books/records for the different funds.
The MRF Committee is composed of: Regional Director (Chair), Regional Executive Director (Co-Chair), Regional Director of EMB (Member), representative of the Autonomous Regional Government (where applicable), representative from the Local Government Unit, representative from local NGOs/community organizations/people’s organizations/church/civic groups, and representative of the Contractor/Permit Holder.
Quarterly meetings are required, with special meetings allowed as needed. At least four (4) members constitute quorum. The Chair presides, or the Co-Chair in absence; otherwise presided by their authorized representatives. Resolutions generally require majority vote of members present, and the presiding officer does not vote except in case of a tie.
Withdrawals are made by the Contractor/Permit Holder only with written instruction to the bank issued by the MRF Committee authorizing the Contractor to withdraw. The request must be based on the AEPEP/EPEP and is subject to MRF Committee approval (with copy furnished to CLRF Steering Committee). If no instruction is issued within thirty (30) calendar days from receipt of request, the Contractor/Permit Holder may sign on behalf of the MRF Committee and withdraw in accordance with the approved plan.
The MMT is the monitoring arm deputized by the MRF Committee. It includes: representative from MGB Regional Office as Head, representative from DENR regional office, representative from EMB regional office, representative of the Contractor/Permit Holder, representative from affected community(ies), representative from affected ICC(ies) if any, and representative from an environmental NGO.
The FMR/DP must be integrated in the EPEP submitted by Contractors/Permit Holders to the MRF Committee and to the CLRF Steering Committee. Further, approval of the FMR/DP (as a mandatory requirement in lieu of the Abandonment/Decommissioning Plan under DAO 2003-30) must be incorporated into the ECC being issued by the DENR Secretary/EMB Director/EMB Regional Director.
Using risk-based methodologies, the FMR/DP must consider closure scenarios and include cost estimates considering expected inflation and technological advances. The estimates must be based on the cost of work by third-party contractors. On a per-year basis, costs must cover the full extent of work needed to achieve mine closure objectives, including decommissioning/rehabilitation/maintenance/monitoring and employee and other social costs (including residual care if necessary) over a ten-year period.
The FMRDF ensures the full cost of the approved FMR/DP is accrued before the end of the mine’s operating life. It is a trust fund deposited in a Government depository bank used solely for the approved FMR/DP. Funding is through annual cash provisions computed using: Annual Provision = Cost of Implementing the Approved FMR/DP x Percentage Required Per Table 1, with initial deposit within sixty (60) days from FMR/DP approval and yearly thereafter (with possible later date upon application).
Withdrawals from the FMRDF require approval by the CLRF Steering Committee upon recommendation by the MRF Committee based on the approved work and financial plan. Expenditures incurred for progressive rehabilitation/annual environmental and enhancement programs under EPEP/AEPEP cannot be reimbursed or credited to the FMRDF and remain governed by other provisions of DAO 96-40.
The FMR/DP must be reviewed and/or revised not exceeding two (2) years after approval and every two (2) years thereafter. It may also be revised whenever justified by changes in mining activities, either on the Contractor’s/Permit Holder’s initiative or at the request of the Director/Regional Director. Annual provisions to the FMRDF may be increased or decreased in conjunction with the review based on factors like crediting progressive rehabilitation and changes in cost/nature of work.