DENR Order on Mine Rehabilitation Fund

Policy Basis and Legal Foundation

The Order restates the Government policy of ensuring that mining activities under permits, agreements, and leases are managed in a technically, financially, socially, culturally, and environmentally responsible manner for the general welfare of the country.
The Order incorporates the concept of planning for mine closure/integrated mine closure planning with environmental, social, and economic considerations integrated into every stage of mining operations, especially during mine closure.
The Order amends Sections 180, 181, 182, 184, 187, 193, 195, 196, 197 of DENR Administrative Order No. 96-40 and Section 9.4 of DENR Administrative Order No. 2003-30 (Environmental Impact System implementing rules).
The Order anchors the establishment of the Final Mine Rehabilitation and Decommissioning Fund on Section 71 of Republic Act No. 7942 and Item f, Section 1 of Executive Order No. 270-A.

Core Definitions and Fund Structure

The Order institutionalizes an environmental guarantee fund mechanism known collectively as the Contingent Liability and Rehabilitation Fund (CLRF) under Section 180.
The CLRF consists of: the Mine Rehabilitation Fund (MRF), the Mine Waste and Tailings Fees, and the Final Mine Rehabilitation and Decommissioning Fund under Section 180.
The CLRF is administered by the CLRF Steering Committee under Section 180.
The Mine Rehabilitation Fund (MRF) is a reasonable environmental deposit established and maintained by each operating Contractor/Permit Holder under Section 181.
The MRF includes two forms: the Monitoring Trust Fund (MTF) and the Rehabilitation Cash Fund (RCF) under Section 181.
The Final Mine Rehabilitation and Decommissioning Plan is integrated into the EPEP submitted to the MRF Committee and the CLRF Steering Committee under Section 187.

Scope, Coverage, and Who Must Comply

Each operating Contractor/Permit Holder must establish and maintain a Mine Rehabilitation Fund under Section 181.
Each operating Contractor/Permit Holder must establish a Final Mine Rehabilitation and Decommissioning Fund (FMRDF) under Section 187-B.
The MRF Committee exists in each Region where acting mining operations exist under Section 182.
The CLRF Steering Committee is an interagency body that administers the CLRF and oversees key approvals and compensation processes under Sections 193–195.
The Multipartite Monitoring Team (MMT) is deputized by the MRF Committee as the monitoring arm under Section 185.
Claims for compensation for damages may be filed by covered persons and entities under Section 199 for categories of compensable damages described in Section 199.

Mine Rehabilitation Funds and Deposits

The Mine Rehabilitation Fund (MRF) ensures availability of funds for satisfactory compliance with commitments and performance stipulated in the EPEP/AEPEP during specific project phase under Section 181.
The MRF is deposited as a Trust Fund in a Government depository bank and is used for physical and social rehabilitation and for research on social, technical, and preventive aspects of rehabilitation under Section 181.
The Monitoring Trust Fund (MTF) is initiated by the Contractor/Permit Holder and deposited in a mutually acceptable Government depository bank for exclusive use in the monitoring program approved by the MRF Committee under Section 181.
The MTF must be cash and not less than P150,000.00, covering specified monitoring and operating expenses; the Secretary may increase the amount for national interest and public welfare upon recommendation of the Director under Section 181.
The MTF requires quarterly replenishment to correspond to monitoring team expenses, and the Contractor/Permit Holder must notify the MRF Committee Chair or Co-Chair of compliance through a certification from the bank under Section 181.

Rehabilitation Cash Fund (RCF) Rules

The Contractor/Permit Holder must set up a Rehabilitation Cash Fund (RCF) for a designated amount to ensure compliance with approved rehabilitation activities and schedules, including research programs, as defined in the EPEP/AEPEP under Section 181.
The RCF must equal ten percent (10%) of the total amount needed to implement the EPEP or P5,000,000.00, whichever is lower under Section 181.
The RCF must be deposited as a Trust Fund in a mutually agreed Government depository bank and placed in four (4) equal quarterly deposits within 15 calendar days from the beginning of each quarter of the first year following EPEP approval under Section 181.
Withdrawal and disbursement from the RCF must be based on the Contractor’s/Permit Holder’s EPEP/AEPEP and submitted to the MRF Committee for consideration and approval with a copy furnished the CLRF Steering Committee under Section 181.
When the mine reaches end of operating life, the RCF is terminated after payment of all outstanding obligations and the remaining amount (including interests) is returned to the Contractor/Permit Holder; thereafter, the Final Mine Rehabilitation and Decommissioning Fund is used for succeeding-years mine closure activities until objectives are achieved under Section 181.

MRF Committee: Duties, Meetings, Composition

The Mine Rehabilitation Fund (MRF) Committee must conduct preliminary evaluation of submitted EPEP, consult credible experts, and evaluate/approve/disapprove EPEP for Industrial Sand and Gravel Permit and Quarry Permit under Section 182.
The MRF Committee manages, operates, monitors, and ensures safety of the MRFs and FMRDFs established and deposited in a Government depository bank under Section 182.
The MRF Committee resolves issues involving progressive mine rehabilitation programs and hires credible experts for independent studies on environmental, engineering, and sociocultural impacts under Section 182.
The MRF Committee ensures strict implementation of approved EPEPs/AEPEPs by Contractors/Permit Holders and deputizes an MMT as monitoring arm with the Regional Office leading role under Section 182.
The MRF Committee must ensure the MTFs, RCFs, and FMRDFs remain separate and distinct with independent books of records for each Contractor/Permit Holder under Section 182.
The MRF Committee is protected from liability for loss or impairment of MRFs arising out of acts done by it in the absence of fraud, bad faith, or gross negligence under Section 182.
The MRF Committee must submit an annual report within 30 calendar days after the end of each year, including audited financial statements and other periodic reports as required, and performs other functions assigned by the Secretary/Director under Section 182.

MRF Committee Membership and Quorum

The MRF Committee is composed of: Regional Director (Chair); Regional Executive Director (RED) (Co-Chair); EMB Regional Director (Member); Autonomous Regional Government representative where applicable (Member); Local Government Unit representative (Member); representative from local NGOs and community organizations including People’s Organizations, church or civic organizations (Member); and representative of the Contractor/Permit Holder (Member) under Section 183.
If the Regional Director and/or RED cannot personally attend, he/she designates or appoints a duly authorized representative in writing under Section 183.
The Regional Office provides technical, secretariat, and administrative support to the Committee under Section 183.
The MRF Committee holds quarterly meetings; special meetings may be called by any member under Section 184.
Meeting notices must be sent at least 10 working days before the intended meeting date under Section 184.
A quorum requires the presence of at least four (4) members under Section 184.
The Chair presides; in absence, the Co-Chair presides; in absence of both, their representatives preside under Section 184.
A majority vote of members present is required unless otherwise provided; the presiding officer does not vote except in case of tie under Section 184.
The MRF Committee must provide the CLRF Steering Committee with copies of minutes within 7 working days after meetings under Section 184.

MMT Monitoring Functions

The Multipartite Monitoring Team (MMT) is deputized by the MRF Committee as the monitoring arm under Section 185.
The MMT includes: MGB Regional Office representative as Head; Department Regional Office representative (Member); EMB Regional Office representative (Member); Contractor/Permit Holder representative (Member); affected community(ies) representative (Member); affected Indigenous Cultural Community(ies) representative if any (Member); and environmental NGO representative (Member) under Section 185.
The MMT may request technical assistance from the MRF Committee when necessary under Section 185.
The MMT Head must submit monitoring status/results report at least 5 working days before scheduled regular MRF Committee meetings under Section 185.

Disbursements from MRF

The Contractor/Permit Holder may withdraw from the MRF only through a written instruction to the bank issued by the MRF Committee authorizing withdrawal under Section 186.
Withdrawals must be in accordance with the AEPEP and approved by the MRF Committee with a copy furnished the CLRF Steering Committee under Section 186.
The instruction to the bank may be issued by the Chair, the Co-Chair, or the designated representative of either under Section 186.
If none issues the instruction within 30 calendar days from receipt of the written request, the Contractor/Permit Holder may sign the instruction on behalf of the MRF Committee and withdraw under the approved AEPEP under Section 186.

Mine Closure Plan and ECC Integration

The Final Mine Rehabilitation and/or Decommissioning Plan (FMR/DP) integrates as a required mine closure plan included in the EPEP submitted by Contractors/Permit Holders to the MRF Committee through the Regional Office and to the CLRF Steering Committee through the Bureau under Section 187.
The FMR/DP must use risk-based methodologies/approaches and must consider all mine closure scenarios under Section 187.
The FMR/DP must contain cost estimates for implementation, accounting for expected inflation, technological advances, and unique mining-operation circumstances under Section 187.
Cost estimates must be based on the cost of having decommissioning and/or rehabilitation works performed by third party contractors under Section 187.
Estimates must cover, on a per-year basis, the full extent of work to achieve mine closure objectives, including decommissioning, rehabilitation, maintenance and monitoring, employee and social costs including residual care if necessary, over a ten-year period under Section 187.
The FMR/DP is subject to pre-evaluation by the MRF Committee and final approval by the CLRF Steering Committee under Section 187.
The Secretary through the Director formulates detailed guidelines for implementation of Section 187 under Section 187.

FMR/DP Link to Environmental Compliance Certificate

The submission and approval of a FMR/DP in lieu of the Abandonment/Decommissioning Plan under Section 9.4 of DAO 2003-30 becomes a mandatory requirement in the Environmental Compliance Certificate (ECC) issued by the DENR Secretary, EMB Director, or EMB Regional Director to Contractors/Permit Holders under Section 187-A.

Final Mine Rehabilitation and Decommissioning Fund

Each operating Contractor/Permit Holder must establish a Final Mine Rehabilitation and Decommissioning Fund (FMRDF) to ensure the full cost of the approved FMR/DP is accrued before the end of mine operating life under Section 187-B.
The FMRDF is deposited as a trust fund in a Government depository bank and is used solely for implementing the approved FMR/DP under Section 187-B.
Contractors/Permit Holders must make annual cash provisions based on the formula: Annual Provision = Cost of Implementing the Approved FMR/DP x Percentage Required Per Table 1 under Section 187-B.
The initial annual cash provision must be submitted to the MRF Committee within 60 days from the date of FMR/DP approval and every anniversary date thereafter under Section 187-B.
The MRF Committee may allow a later date for the first annual provision upon application by the Contractor/Permit Holder under Section 187-B.

FMRDF Disbursements, Progress, and Review

Withdrawal from the FMRDF requires CLRF Committee approval upon recommendation by the MRFC, based on approved work and financial plan under Section 187-C.
Amounts incurred by the Contractor/Permit Holder for progressive rehabilitation/annual environmental and enhancement programs under EPEP/AEPEP cannot be reimbursed or credited to the FMRDF and remain governed by relevant provisions of DAO 96-40 under Section 187-C.
The Contractor/Permit Holder must submit a progress report (if applicable) detailing fully, partially, and ongoing rehabilitation activities relative to the implementation of the FMR/DP under Section 187-D.
The progress report must be submitted to the MRF Committee for review and evaluation within 30 days from the end of the term of the preceding work and financial plan (if applicable), and results must be integrated in the succeeding year’s work and financial plan under Section 187-D.
The FMR/DP must be reviewed and/or revised not exceeding 2 years after approval and every 2 years thereafter, and it may be reviewed/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 under Section 187-E.
In conjunction with review/revision, annual provisions to the FMRDF may be increased or decreased to credit progressive rehabilitation works and to account for changes in the nature or cost of work under Section 187-E.

Final Relinquishment and Release of Remaining Funds

The Contractor/Permit Holder must prepare and submit a Final Rehabilitation Report with third party Environmental Audit (FRR with EA) for pre-evaluation by the MRF Committee and final approval by the CLRF Steering Committee under Section 187-F.
The FRR with EA must be submitted after the Contractor/Permit Holder assessment that mine closure objectives in the approved FMR/DP are achieved under Section 187-F.
The MRF Committee and/or CLRF Steering Committee may conduct field validation, recommend revisions, and/or require additional rehabilitation works under Section 187-F.
If residual care is still needed, the Contractor/Permit Holder must submit a Site Management Plan detailing management of residual rehabilitation commitments under Section 187-F.
The CLRF Steering Committee issues a Certificate of Final Relinquishment signifying approval of the FRR with EA and freeing the Contractor/Permit Holder from further obligations insofar as rehabilitated areas are concerned under Section 187-F.
Remaining fund amounts are released back to the Contractor/Permit Holder, including any remaining amount based on total FMRDF annual provisions and MWTF payments under Section 187-F.
Any shortfall needed to achieve mine closure objectives under the approved FMR/DP and implement the Site Management Plan must be shouldered by the Contractor/Permit Holder under Section 187-F.

Mine Waste and Tailings Fees Reserve Fund

Mine waste and tailings fees are collected semiannually from each operating Contractor/Lessee/Permit Holder based on amounts of mine waste and mill tailings generated under Section 189.
Fees accrue to a Mine Waste and Tailings (MWT) Reserve Fund and are deposited in a Government depository bank for payment of compensation for damages caused by mining operations under Section 189.
The MWT Reserve Fund must also be used for research projects approved by the CLRF Steering Committee that promote and further its objectives under Section 189.

Mine Waste and Tailings Fees (MWTF) Rates

Basic fees accruing to the MWT Reserve Fund are P0.05/MT of mine waste produced and P0.10/MT of mill tailings generated under Section 190.
Fees do not apply where mine waste and mill tailings are utilized in the manner enumerated in Section 190(a) to (e) under Section 190.
For surface mine openings, filling materials are allowed only if they do not affect natural drainage systems as determined by the Committee or its duly authorized representative under Section 190(b).
For engineered tailings dams, roads, and housing areas, filling materials are allowed only if they do not affect natural drainage systems as determined by the Committee or its duly authorized representative under Section 190(c).
Tailings impoundment/disposal systems that discharged and/or are discharging solid fractions of tailings into areas other than the approved tailings disposal area require payment of P50.00/MT, without prejudice to other penalties and liabilities under other laws under Section 190(c).
For mine waste impounded for future use, a two-year work program must be submitted with the semi-annual report; beneficial use must occur within two (2) years; non-utilization within the two (2) year period triggers the corresponding fee of P0.05/MT under Section 190(e).
Non-submission of the work program means disqualification from exemption from payment of fees under Section 190(e).
Mining companies using engineered and well-maintained mine waste and tailings disposal systems with zero-discharge of materials/effluent and/or with wastewater treatment plants that consistently meet Department standards are exempted from payment of mine waste and tailings fees under Section 190.
The Secretary may increase the fees upon recommendation of the Director when national interest and public welfare so require under Section 190.

Payment, Reports, and Timing

Mine waste and tailings fees are payable to the Bureau within 45 calendar days after the end of each semester under Section 191.
Fees are based on the sworn semi-annual report (MGB Form No. 18-1) submitted to the Bureau with a copy furnished to the concerned Regional Office, stating specified details under Section 191.
Contractors/Lessees/Permit Holders with no mine waste nor mill tailings generated must submit sworn semi-annual reports stating no such materials were generated during the period under Section 191.
The sworn report must state amounts of mine waste and/or mill tailings produced, stored/impounded, and/or utilized, and the manner by which the mine waste and/or mill tailings produced was utilized under Section 191(a) to (b).

Penalties for Mine Waste and Tailings Noncompliance

Failure to submit semi-annual reports means non-availment of exemption from payment of mine waste and tailings fees and results in a penalty of PHP 5,000.00 under Section 192.
Failure to comply with payment of mine waste and tailings fees results in a 10% surcharge on the principal amount for every month of delay under Section 192.
The Contractor/Lessee/Permit Holder must pay damages incurred due to previously exempted mine waste and tailings described in Section 190 under Section 192.
Fees previously requested for exemption but denied based on verification must be remitted within 60 calendar days upon receipt of notice; failure results in a 10% surcharge on the principal amount for every month of delay under Section 192.

CLRF Steering Committee Powers and Work

The CLRF Steering Committee evaluates and approves/disapproves submitted EPEP, FMR/DP and consults with credible experts and advisory bodies for proposal clarification and adequacy of control and rehabilitation measures under Section 193.
The CLRF Steering Committee monitors MRFs deposited in a Government depository bank and monitors FMRDFs established under the rules under Section 193.
The Committee resolves issues involving final mine rehabilitation and decommissioning to be implemented under Section 193.
The Committee hires credible experts for independent studies and research on environmental, engineering, and sociocultural impacts to support decision-making under Section 193.
The Committee monitors and evaluates MRF Committees under Section 193.
The Committee administers the MWT Reserve Fund under Section 193.
The Committee evaluates and decides applications for compensation for damages and prescribes documentary requirements for those applications under Section 193.
The Committee appoints/designates members of a Technical Working Group and Regional Investigation and Assessment Teams to assist investigation and assessment of claims, while exercising general supervision under Section 193.
The Committee provides funds from MRFs and the MWT Reserve Fund for research and special projects deemed necessary to promote environmental objectives under Section 193.
The Committee implements duly approved guidelines/rules and formulates policy recommendations for the Secretary; it also recommends allowances to officials/personnel performing functions and duties under Section 193.
The Committee submits an annual report within 30 calendar days after the end of each year and periodic reports as required, and performs other functions assigned by the Secretary under Section 193.

CLRF Committee Composition and Meetings

The CLRF Steering Committee is composed of: Director (Chair); Director of Environmental Management Bureau (Vice-Chair); Director of Lands Management Bureau (Member); Director of Forest Management Bureau (Member); Director of Bureau of Soils and Water Management (Member); Director of Bureau of Plant Industry (Member); Director of Bureau of Fisheries and Aquatic Resources (Member); Administrator of the National Irrigation Administration (Member); and Assistant Director of the Bureau as Committee Coordinator under Section 194.
The Chair or Vice-Chair designates or appoints a duly authorized representative when unable to attend under Section 194.
The Bureau provides secretariat and administrative support to the CLRF Steering Committee under Section 194.
The CLRF Steering Committee holds quarterly meetings with special meetings as needed under Section 195.
Meeting notices must be sent at least 10 days before the intended meeting date under Section 195.
A quorum requires at least five (5) members under Section 195.
The Chair presides; in the absence of the Chair, the Vice-Chair presides; in absence of both, their representatives preside under Section 195.
Decisions require a majority vote of members present unless otherwise provided, and the presiding officer votes only in case of tie under Section 195.

Technical Working Group and RIAT

The Bureau creates a Technical Working Group (TWG) to assist the CLRF Steering Committee under Section 196.
The TWG acts as technical staff, receives and evaluates EPEP and FMR/DP for form and substance, imposes additional requirements and documentation, and consults credible experts including the Director of the Philippine Social Science Council, Director of the National Museum, and offices of Northern and Southern Cultural Communities when required under Section 196.
The TWG conducts annual environmental audits to ensure strict implementation of approved EPEPs/AEPEPs and FMR/DPs under Section 196.
The TWG verifies quantities of mine waste and mill tailings generated and computes/collects mine waste and tailing fees under Section 196.
The TWG receives, processes, evaluates, and conducts preliminary investigations of claims for damages and submits recommendations to the CLRF Committee and assists in investigation and assessment with recommendations to the CLRF Steering Committee under Section 196.
The TWG drafts guidelines/rules/resolutions and other documents connected to environmental provisions and performs other functions assigned under Section 196.
The CLRF Steering Committee is assisted by Regional Investigation and Assessment Teams (RIAT) composed of representatives from Regional Offices and other needed agencies under Section 198.
The RIAT is headed by the Regional Director and provides advice, distributes forms, receives damage compensation applications, conducts field investigations and assessments (MGB Form No. 18-3), creates local task forces when necessary, and performs other assigned functions under Section 198.

Applications and Evaluation of Damages

Compensable damages include damages caused by mining operations affecting lives and personal safety; lands, agricultural crops and forest products; marine life and aquatic resources; cultural and human resources; and infrastructure and revegetation/rehabilitation of silted farm lands and other agricultural and fishing areas under Section 199.
Qualified applicants include individuals for loss or damage to life/personal safety/property; private owners of damaged infrastructures and natural resources; applicants or successors-in-interest for private lands with title or evidence of ownership; applicants or successors-in-interest for alienable and disposable lands; agricultural lessors/lessees/share tenants for crop damages; and Indigenous Cultural Communities for damage to burial grounds and cultural resources under Section 199(a) to (f).
Damage to the property of a surface owner, occupant, or concessionaire is governed by the pertinent provisions of Chapter X on Surface Rights under Section 199.
Applications for compensation must be filed using prescribed application forms (MGB Form No. 18-2) with RIAT within 30 calendar days from the occurrence of damage under Section 199.
Applications must be supported by proof of ownership, receipt of expenditures for impositions in the affected property, and other requirements required by the CLRF Committee under Section 199(a) to (c).
Tax declarations are honored as proof of ownership only for the purposes of compensation under these rules under Section 199(a).

Compensation Determination Rules and Appeals

Compensation for damages is drawn from the mine waste and tailings fees collected from the responsible Contractor(s)/Lessee(s)/Permit Holder(s) as determined by the CLRF Steering Committee; if assessed damages exceed fees paid, the Contractor(s)/Lessee(s)/Permit Holder(s) must pay the remaining balance under Section 200(a).
Damages to lives and personal safety are compensated at an amount provided in other pertinent laws under Section 200(b).
Agricultural lands rendered useless for traditional purpose may be compensated at the lower of the fair market value per tax declaration or the cost of rehabilitation under Section 200(c).
Partial loss of agricultural productivity is compensated at the cost of rehabilitation under Section 200(d).
Industrial and residential lands may be compensated at the cost of rehabilitation under Section 200(e).
Total or partial loss of agricultural crops, forest products, and/or inland aquatic resources is compensated at an amount equivalent to the loss of projected net income under Section 200(f).
Damages to infrastructures are compensated at an amount equivalent to rehabilitation