Question & AnswerQ&A (EXECUTIVE ORDER NO. 279)
Section 2 of Article XII of the 1987 Constitution provides that the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State, which may directly undertake such activities or enter into agreements with Filipino citizens or qualified corporations for such purposes.
The Secretary of the Department of Environment and Natural Resources (DENR) is authorized to negotiate and enter into joint venture, co-production, or production-sharing agreements on behalf of the government.
Corporations must have at least sixty percent (60%) of their capital owned by Filipino citizens to enter into joint venture, co-production, or production-sharing agreements with the government.
The agreements may be for a period not exceeding twenty-five (25) years, renewable for not more than another twenty-five (25) years.
The minimum terms and conditions include: (a) management, technology, and financial services by the contractor; (b) preference for local goods and services; (c) that the contractor shall not acquire title to the contract area; (d) stipulated share in revenues and manner of payment; (e) exploration period not exceeding two (2) years, extendible for another two (2) years; among others.
The agreements must include industrial safety and anti-pollution measures, as well as restoration and/or protection of the environment.
Yes, the Secretary may consolidate two or more contiguous or geologically related mining claims or leases and consider them as one contract area for the purpose of the agreement.
Large-scale mining contracts with foreign-owned corporations must involve a committed capital investment of at least Fifty Million United States Dollars (US$50,000,000.00) in a single mining unit project.
The President of the Philippines must approve such contracts or agreements.
The Executive Secretary must report any contract or agreement entered into by the President under Section 4 to Congress within thirty (30) days from its execution.
No, contractors shall not acquire title to the contract area as stipulated in the minimum terms and conditions of the agreements.