QuestionsQuestions (ADMINISTRATIVE ORDER NO. 2002-35)
The text cites (1) Article II of the 1987 Constitution, stating mineral resources are owned by the State and exploration/development/utilization are under State control and supervision, and (2) Section 4 of Republic Act (R.A.) No. 7942 (Philippine Mining Act of 1995), reinforcing State ownership/control. It also cites E.O. No. 192 assigning DENR as primary agency for conservation, management, licensing, and regulation, and Section 8 of R.A. No. 7942 authorizing the DENR Secretary to promulgate implementing rules.
DAO No. 2002-35 provides guidelines for management, administration, and regulation of mining and mineral processing within the Diwalwal Mineral Reservation and Environmentally Critical Area declared by Proclamation No. 297 (Nov. 25, 2002), including health/safety, environmental protection, mine rehabilitation, peace and order stabilization, and benefit-sharing.
It covers the management, administration, and regulation of all mining and mining processing operations and related activities within the Diwalwal Mineral Reservation declared under Proclamation No. 297.
It defines the area as the Mineral Reservation and Environmentally Critical Area under Proclamation No. 297, particularly bounded by specific geographic coordinates listed in the DAO. This boundary determines where the rules—allocation, service contracts, transport permitting, enforcement, and prohibition of processing in mining areas—apply.
Mines and Geosciences Bureau (MGB) identifies and delineates mining/mineral processing areas by considering ore vein trends/dimensions, access, buffer zones, and related development works. Operations are allowed only after proper verification on the ground through technical and geodetic surveys by the MGB.
The DENR directly undertakes mining and mineral processing operations in identified areas through the Natural Resources Development Corporation (NRDC) with assistance from MGB and other DENR sectors, subject to payment of just compensation that may be due legitimate and existing claimants.
NRDC must: (1) implement a medium-scale, labor-intensive mine management plan; (2) secure necessary permits/licenses and comply with requirements; (3) avail competent professionals for planning/design/implementation; (4) construct/operate processing plants and mill tailings disposal system in the Mabatas area; (5) collect Government share; (6) establish the environmental and social fund; (7) initiate environmental clean-up; (8) coordinate with EMB and other agencies; and (9) optionally provide services like ventilation/power/blasting/assaying.
The DAO uses service contracts as agreements where DENR or NRDC authorizes mining/process-related work in the Diwalwal Mineral Reservation. Section 8 provides that the DENR Secretary or NRDC may enter into service contracts with mining groups/cooperatives presently occupying and actively mining in the Diwalwal areas, following MEC recommendations (subject to DENR Secretary’s direct entry to protect Government interest).
Any service contract for mining purpose must be confined to the limits and immediate vicinity of the Diwalwal mining areas, as specified by the additional coordinate points listed in Section 8, and it must be allocated by underground levels/working areas consistent with Section 5.
MEC evaluates applications for service contracts and indorses the rightful applicants to the MGB Regional Director. It is chaired by the Team Leader, Diwalwal Technical Working Group, and includes representatives from mining groups/cooperatives, LGU, Indigenous Cultural Community(ies), and an NGO.
Up to 25% of the Diwalwal Mineral Reservation may be allocated for small-scale mining cooperatives covered by R.A. No. 7076 (People’s Small-Scale Mining Act of 1991).
Transportation of minerals/mineral products (including tailings still containing valuable metals in economic quantity) must be covered by an Ore Transport Permit (OTP). Absence of an OTP is sufficient ground for confiscation/seizure in favor of Government and disposal under existing laws.
All mineral processing operations are no longer allowed in the Diwalwal mining areas. Instead, the Mabatas Area must be made available as the relocation site for Diwalwal mineral processing plants and for a common tailings disposal system with engineered tailings dam(s), and Mabatas also serves as a resettlement site for the Diwalwal community.
Under Section 13, NRDC must submit a programmatic Environmental Protection and Enhancement Program (EPEP) guided by DAO 96-40 (Chapter XVI) and comply with EIA and issuance of ECCs. It must also submit a Social Development and Management Program (SDMP) guided by DAO 2000-99. Under Section 15, a Mine Rehabilitation Fund is established based on the approved work program and used for physical and social rehabilitation and mine rehabilitation research.
Only NRDC is authorized to secure licenses to possess/transport/use explosives, blasting accessories, and chemicals. Applications require endorsement by the MGB Regional Office or EMB (as the case may be) to the Philippine National Police—Firearms and Explosives Office, consistent with applicable law and implementing rules.
MGB and EMB strictly enforce the mine management plan and ECC of NRDC and the service contractors. If there are violations of conditions in the service contract or applicable laws/rules, after conferring/consulting, they may recommend suspension of operations or cancellation of service contracts to the Secretary.
DENR/MGB and its deputies are empowered to confiscate, seize, and dispose in accordance with existing rules and regulations illegally sourced ores and mill tailings; apprehend violators according to existing laws and rules; and file appropriate charges in proper court if warranted.
All gold produced by service contractors must be sold to the Bangko Sentral ng Pilipinas (BSP) or its duly authorized representatives. Prices must be competitive with those prevailing in the world market regardless of volume or weight.
NRDC may collect as share of Government not more than 20% of the ore produced by a service contractor. It is allocated for excise tax and royalties due Government from a mineral reservation and for the Indigenous Peoples as provided by law, as well as NRDC management fee, provision for the social/environmental fund, among others. NRDC may also collect appropriate service fees from service contractors for mineral processing.
Mining disputes are settled by a tribunal of Arbitrators: each opposing party appoints one arbitrator, and the MGB Director (or his representative) acts as Chairman. The arbitration is conducted pursuant to R.A. No. 876 (Arbitration Act).