Title
PRESIDENTIAL DECREE NO. 972
Date
Jul 28, 1976
The Coal Development Act of 1976 aimed to promote coal exploration and utilization in the Philippines by providing incentives to operators and industries, establishing a coal development program, and addressing labor, health, safety, and environmental regulations.
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Law Summary

Introduction

Presidential Decree No. 972, promulgated on July 28, 1976, aims to promote the accelerated exploration, development, exploitation, production, and utilization of coal resources in the Philippines. The decree addresses the need to reduce reliance on imported oil and enhance the country's energy independence.

SECTION 1: Short Title

  • Legal Provision: This Act may be cited as "The Coal Development Act of 1976."
  • Key Definitions: None explicitly stated in this section.

SECTION 2: Declaration of Policy

  • Legal Provision: The state declares its policy to accelerate coal resource development.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Establishment of a coal development program.

SECTION 3: Coal Development Program

  • Legal Provision: The country will be divided into coal regions for systematic exploration and exploitation.
  • Key Definitions: "Coal regions" defined as areas designated for coal exploration and exploitation.
  • Important Requirements: Special programs for regions with small coal miners.
  • Timeframes: None specified.

SECTION 4: Government to Undertake Coal Exploration Development and Production

  • Legal Provision: The Energy Development Board will lead coal resource exploration and production.
  • Key Definitions: "Coal operating contracts" defined as agreements for coal resource management.
  • Important Requirements: The government may explore both public lands and private claims.
  • Timeframes: None specified.

SECTION 5: Blocking System

  • Legal Provision: Establishment of coal regions divided into blocks for exploration.
  • Key Definitions: "Blocks" defined as areas of about 1,000 hectares.
  • Important Requirements: The Energy Development Board will delineate regions.
  • Timeframes: None specified.

SECTION 6: Coal Contract Area

  • Legal Provision: Procedures for granting coal operating contracts.
  • Key Definitions: "Coal operating contracts" referenced.
  • Important Requirements: Bidding or negotiation for contract areas; limits on land blocks per person.
  • Timeframes: None specified.

SECTION 7: Existing Permittees/Leaseholders

  • Legal Provision: Preference for existing permit holders in new contracts.
  • Key Definitions: "Coal units" defined as consolidated groups of permit holders.
  • Important Requirements: Consolidation of existing permits into coal units within six months.
  • Timeframes: Deadline for contract execution extended to January 27, 1978.
  • Penalties: Non-compliance results in cancellation of existing rights.

SECTION 8: Coal Operating Contract

  • Legal Provision: Execution of coal operating contracts is subject to the President's approval.
  • Key Definitions: "Operator" defined as the entity managing coal operations.
  • Important Requirements: Operators must demonstrate financial and technical capability.
  • Timeframes: None specified.

SECTION 9: Obligations of Operator in Coal Operating Contract

  • Legal Provision: Operators must manage coal operations effectively.
  • Key Definitions: "Operating expenses" defined as expenditures incurred by operators.
  • Important Requirements: Detailed management and reporting responsibilities outlined.
  • Timeframes: None specified.

SECTION 10: Additional Fee

  • Legal Provision: Additional fee structures for coal units and contracts.
  • Key Definitions: "Special allowance" defined as additional compensation for operators.
  • Important Requirements: Compliance with conditions for allowances.
  • Timeframes: None specified.

SECTION 11: Minimum Terms and Conditions

  • Legal Provision: Minimum financial obligations for operators in contracts.
  • Key Definitions: "Exploration work" and "commercial quantity" referenced.
  • Important Requirements: Specific financial commitments and work obligations.
  • Timeframes: Exploration period set for two years, renewable under conditions.

SECTION 12: Full Disclosure of Interest in Coal Operating Contract

  • Legal Provision: Disclosure of interests by domestic mining companies is required.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Full disclosure and approval by the Energy Development Board required.
  • Timeframes: None specified.

SECTION 13: Arbitration

  • Legal Provision: Disputes may be settled through arbitration.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Contracts may include arbitration clauses.
  • Timeframes: None specified.

SECTION 14: Performance Guarantee

  • Legal Provision: Operators must post a performance bond.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Guarantee of performance compliance.
  • Timeframes: None specified.

SECTION 15: Transfer and Assignment

  • Legal Provision: Rights under contracts cannot be transferred without approval.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Transferable only to qualified individuals or entities.
  • Timeframes: None specified.

SECTION 16: Incentives to Operators

  • Legal Provision: Various tax exemptions and incentives for operators.
  • Key Definitions: "Philippine National" as defined under Republic Act No. 5186.
  • Important Requirements: Specific conditions for tax exemptions and incentives.
  • Timeframes: None specified.

SECTION 17: Incentives to Coal Users

  • Legal Provision: Incentives for industries converting to coal.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Tax exemptions on machinery for conversion.
  • Timeframes: Seven years for incentive applicability.

SECTION 18: Implementing Agency

  • Legal Provision: The Energy Development Board is tasked with implementing this decree.
  • Key Definitions: None explicitly stated in this section.
  • Important Requirements: Authority to create regulations for implementation.
  • Timeframes: None specified.

SECTION 19: Separability Clause

  • Legal Provision: Unconstitutionality of any provision does not affect others.
  • Key Definitions: None explicitly stated in this section.

SECTION 20: Repealing Clause

  • Legal Provision: Repeal of previous laws conflicting with this decree.
  • Key Definitions: None explicitly stated in this section.

SECTION 21: Effectivity

  • Legal Provision: The decree is effective immediately upon approval.
  • Key Definitions: None explicitly stated in this section.

Key Takeaways

  • The Coal Development Act of 1976 establishes a framework for enhancing the exploration and production of coal in the Philippines.
  • It outlines the roles of the government, private sector participation, and specific requirements for coal operating contracts.
  • Incentives for both operators and users are provided to promote coal utilization over imported oil.
  • Existing rights and permits are subject to consolidation and compliance with new regulations, with strict deadlines and penalties for non-compliance.

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