Guidelines on Diwalwal Mining Area Management

Constitutional and statutory framework

The Order is anchored on Article II of the 1987 Philippine Constitution and Section 4 of Republic Act No. 7942 (Philippine Mining Act of 1995), which recognize that mineral resources are owned by the State and subject to State control and supervision.
E.O. No. 192 makes the Department of Environment and Natural Resources (DENR) the primary agency for conservation, management, development, and proper use of the environment and natural resources, including licensing and regulation.
Section 8 of Republic Act No. 7942 designates DENR as the primary agency for mineral resource conservation and management, and authorizes the DENR Secretary to promulgate necessary implementing rules.
The Order implements Proclamation No. 297 (November 25, 2002), which declares the area as Mineral Reservation and Environmentally Critical Area, covering the Diwalwal mining areas and the Mabatas Area.
Proclamation No. 297 allows mining operation in the Mineral Reservation to be undertaken either by DENR directly, subject to just compensation to legitimate and existing claimants, or through a qualified contractor, subject to existing rights.
Section 5 of Republic Act No. 7942 provides that mining operation in a mineral reservation may be undertaken either directly by the DENR or through a contractor.
The Order relies on DAO No. 2002-18 (August 12, 2002) as an interim emergency framework governing Diwalwal operations pending compliance and completion of specified relocation and management requirements.
The Order further references DAO No. 96-40 (as amended) for mining-related standards, including transport and environmental requirements, and cites Republic Act No. 876 (Arbitration Act) for dispute resolution.

Policy objectives and guiding principles

Section 2 directs that mining and mineral processing operations in the Mineral Reservation and Environmentally Critical Area must be rationalized for greater efficiency while ensuring adequate environmental protection and mine rehabilitation.
Section 2 requires adequate addressing of health and safety concerns of miners, mineral processors, and residents.
Section 2 mandates uplifting the social and economic well-being of underprivileged sectors directly and indirectly involved in mining and mineral processing.
Section 2 requires stabilization of peace and order in the area.
Section 2 imposes an equitable sharing scheme for benefits derived from utilization of mineral resources.
Section 2 requires that benefits from mining and mineral processing accrue to communities, both local and national government, and other legitimate stakeholders.

Coverage and operational boundaries

Section 3 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 (November 25, 2002).
The Diwalwal Mineral Reservation is defined by specific geographical coordinate points under Section 4(a).
The Order provides that mining and mineral processing operations must be confined to delineated areas identified under Section 5.
Section 8 limits Service Contracts (for mining purpose) to defined limits and immediate vicinity of the Diwalwal mining areas using a coordinate set in Section 8(a).
Section 12 prohibits mineral processing operations in the Diwalwal mining areas and mandates relocation to the Mabatas Area for mineral processing and common tailings disposal.

Definitions and key terms

Section 4(a) defines “Diwalwal Mineral Reservation” as the Proclamation No. 297-declared Mineral Reservation and Environmentally Critical Area, bounded by specified latitude-longitude coordinates.
Section 4(b) defines “Mill Tailings” as segregated materials from mineral processing operations (solid, liquid, or both) that may or may not have economic values.
Section 4(c) defines “Mine Waste” as soil and/or rock materials from surface or underground mining with no present economic value to the generator.
Section 4(d) defines “Mineral Processing” to include milling, beneficiation, leaching, smelting, cyanidation, calcination, upgrading of ores/minerals/rocks and metallurgical by-products, and related means to convert them into marketable products.
Section 4(e) defines “Natural Resources Development Corporation” (NRDC) as the government corporation established as a corporate arm of DENR pursuant to E.O. No. 786 (March 19, 1982).
Section 4(f) defines “Ore Transport Permit (OTP)” as the permit that may be granted to a Service Contractor to transport minerals/mineral products.
Section 4(g) defines “Service Contractor” as a person or entity that enters into an agreement with DENR or NRDC to undertake specific work(s) related to mining or mineral processing operations.

Area delineation and State direct utilization

Section 5(a) empowers the Mines and Geosciences Bureau (MGB) to identify and delineate mining and mineral processing areas within the Diwalwal Mineral Reservation where gold mining may be allowed.
Section 5(a) requires delineation to mainly consider ore vein/vein system trends, dimensions, sites, access to veins and working areas, buffer zones, and other development works.
Section 5(a) mandates DENR to endeavor to confine all mining and mineral processing operations to the MGB-delineated areas.
Section 5(a) allows actual mining and mineral processing operations in delineated areas only after ground verification through technical and geodetic surveys by the MGB.
Section 6(a) provides that DENR shall directly undertake mining and mineral processing in certain identified areas in the Diwalwal Mineral Reservation through NRDC with assistance of MGB and other DENR sectors, subject to just compensation to legitimate and existing claimants.
Section 6(a) requires the DENR and NRDC to enter into a Memorandum of Agreement embodying pertinent terms and conditions.

NRDC duties and service contracting system

Section 7(a) makes NRDC the DENR implementing arm for mining and mineral processing in the Diwalwal Mineral Reservation, under strict coordination with the MGB.
Section 7(a) requires NRDC to implement a medium-scale and labor-intensive mine management plan that is cost-effective, environmentally sound, and socially responsible.
Section 7(a) requires NRDC to secure necessary permits and licenses and comply with requirements for mining and mineral processing operations.
Section 7(a) requires NRDC to avail competent professional groups for planning, design, and implementation works.
Section 7(a) requires NRDC to construct and operate mineral processing plant(s) and a mill tailings disposal system in the Mabatas Area.
Section 7(a) requires NRDC to collect the Government share from utilization of mineral resources in the Diwalwal Mineral Reservation.
Section 7(a) requires NRDC to establish the environmental and social fund required under Proclamation No. 297.
Section 7(a) requires NRDC to initiate environmental clean-up of Diwalwal mining areas, the Naboc River, and other affected areas.
Section 7(a) allows NRDC, at its option and subject to just compensation, to provide services such as ventilation and power supply, blasting and assaying.
Section 7(a) requires NRDC to coordinate with DENR’s Environmental Management Bureau (EMB) and other DENR government agencies in implementing the mine management plan.

Service contracts: evaluation, limits, and continuity

Section 8(a) allows the DENR Secretary or NRDC to enter into service contracts with mining groups/cooperatives presently occupying and actively mining in Diwalwal mining areas for mining and/or processing ores.
Section 8(a) requires that mining-area allocation conform to the delineation method in Section 5 (underground levels/working areas).
Section 8(a) confines any mining-purpose Service Contract to the limits and immediate vicinity of Diwalwal mining areas using the coordinates listed in Section 8(a).
Section 8(a) requires execution of Service Contracts to be upon recommendations of the MGB Regional Director concerned / Multisectoral Evaluation Committee through the MGB Director.
Section 8(a) allows the DENR Secretary, on MGB Director recommendation, to directly enter Service Contracts with rightful applicants to protect and preserve Government interest.
Section 8(a) provides that Service Contracts entered by the DENR Secretary or NRDC prior to effectivity that are not inconsistent with the Order remain valid with full force and effect.

Multisectoral Evaluation Committee structure

Section 9(a) establishes a Multisectoral Evaluation Committee (MEC) for initial evaluation of Service Contract applications and endorsement of rightful applicants to the MGB Regional Director concerned.
Section 9(a) sets the Chairperson as Team Leader, Diwalwal Technical Working Group.
Section 9(a) requires MEC members to include:
- a representative of mining groups/cooperatives,
- a representative of the Local Government Unit (Mt. Diwata reference),
- a representative of Indigenous Cultural Community(ies) concerned,
- a representative of a Nongovernment Organization concerned.

Small-scale mining allocation and ore transport control

Section 10(a) requires MGB to allocate a maximum of twenty-five per cent (25%) of the Diwalwal Mineral Reservation for small-scale mining cooperatives covered by Republic Act No. 7076 (People’s Small-Scale Mining Act of 1991).
Section 11(a) requires transportation of minerals and/or mineral products (including tailings still containing valuable metals in economic quantity) from the Diwalwal Mineral Reservation to be covered by an Ore Transport Permit (OTP).
Section 11(a) provides that absence of an OTP is sufficient ground for confiscation/apprehension of transported materials in favor of the Government and disposal under existing laws, rules, and regulations.
Section 11(a) provides that an OTP shall be issued only to service contractors upon NRDC recommendation, consistent with the rules under DAO No. 96-40 (as amended).

Tailings, waste, and relocation mandates

Section 12(a) requires mine wastes and mill tailings produced under the contemplated operations to be managed in a technically, financially, socially, culturally, and environmentally acceptable manner.
Section 12(a) requires management to effectively safeguard the environment and protect the rights of concerned communities.
Section 12(a) mandates that management follow current best practices committed to control impacts and protect the environment.
Section 12(a) requires equal emphasis on economic and environmental considerations, as well as safety, health, social, and cultural concerns.
Section 12(a) requires implementation through DENR Memorandum Order No. 99-32, titled Policy Guidelines and Standards for Mine Waste and Mill Tailings Management.
Section 12(a) prohibits mineral processing operations in the Diwalwal mining areas.
Section 12(a) requires the Mabatas Area to be made available as the relocation site of Diwalwal mineral processing plants and as the area for a common tailings disposal system featuring engineered tailings dam(s).
Section 12(a) requires the Mabatas Area to also be made available as the resettlement site of the Diwalwal community.

Environmental, social programs, and explosives controls

Section 13(a) requires NRDC to submit for approval and implement a programmatic Environmental Protection and Enhancement Program (EPEP) for mining and mineral processing operations.
Section 13(a) provides that the EPEP must be guided by Chapter XVI (Environmental Protection) of DAO No. 96-40 (as amended).
Section 13(a) requires strict compliance with all other legal requirements, including conducting a programmatic Environmental Impact Assessment (EIA) and the issuance of appropriate Environmental Clearance Certificates (ECCs) by DENR.
Section 13(a) requires NRDC to submit a Social Development and Management Program (SDMP) for mining and mineral processing operations.
Section 13(a) provides that the SDMP must be guided by DAO No. 2000-99, the Rules and Regulations on implementation of SDMP for mining projects.
Section 14(a) authorizes only NRDC to secure licenses to possess, transport, and use explosives, blasting accessories, and chemicals for mining and mineral processing operations.
Section 14(a) requires license applications to include endorsement by the MGB Regional Office concerned or EMB (as the case may be) to the Philippine National Police – Firearms and Explosives Office, consistent with applicable law and implementing rules and regulations.
Section 14(a) allows the DENR Secretary to authorize other qualified entities to secure such licenses to protect and preserve Government interest in the Diwalwal Mineral Reservation.

Mine rehabilitation and enforcement mechanisms

Section 15(a) requires the Service Contractor to technically and biologically rehabilitate excavated, mined-out, tailings-covered, and/or disturbed areas as provided in Chapter XVIII of DAO No. 96-40 (as amended).
Section 15(a) requires establishment of a Mine Rehabilitation Fund based on the approved work program.
Section 15(a) requires the Mine Rehabilitation Fund to be deposited as a trust fund in a government depository bank.
Section 15(a) requires fund use for physical and social rehabilitation of affected areas and communities and for research on social, technical, and preventive mine rehabilitation aspects.
Section 16(a) requires MGB and EMB to strictly enforce implementation of the mine management plan and ECC of NRDC and the Service Contractor(s).
Section 16(a) authorizes MGB and/or EMB, after conferring/consulting, to recommend suspension of mining/processing operations or cancellation of Service Contract(s) to the Secretary upon violations of Service Contract conditions or applicable laws/rules/regulations.

Apprehension, seizure, gold sale, monitoring, and reports

Section 17(a) empowers DENR/MGB and its deputies to confiscate, seize, and dispose of illegally sourced ores and mill tailings under existing rules and regulations.
Section 17(a) empowers DENR/MGB and its deputies to apprehend violators under existing laws and rules and to file appropriate charges in the proper court if warranted.
Section 18(a) requires that all gold produced by Service Contractors from the Diwalwal Mineral Reservation be sold to Bangko Sentral ng Pilipinas or its duly authorized representatives at prices competitive with world market prevailing prices, regardless of volume or weight.
Section 20(a) provides that the Diwalwal Multipartite Monitoring Team (MMT) created under DENR Special Order No. 2002-955 must be maintained to pursue functions relating to Service Contractor compliance with Service Contract terms and conditions.
Section 22(a) requires NRDC and all Service Contractors to submit monthly, quarterly, semi-annual, and annual reports—particularly production and sales—pursuant to Sections 270 and 271 of DAO No. 96-40 (as amended).

Government share, fees, service providers, and disputes

Section 19 authorizes NRDC to collect as share of Government not more than twenty per cent (20%) of the ore produced by a Service Contractor.
Section 19 directs that the Government share shall be allocated for:
- payment of excise tax and royalties due Government and the Indigenous Peoples concerned as provided by law,
- NRDC management fee,
- provision for the social and environmental fund, among others.
Section 19 authorizes NRDC to collect appropriate service fees from Service Contractors for mineral processing.
Section 21(a) allows Service Contractors to avail of Service Providers under terms not disadvantageous to Service Contractors’ interest and welfare.
Section 21(a) requires Service Provider contracts/agreements to be subject to review and approval by the MGB Director upon recommendation of the MGB Regional Director concerned / Diwalwal Technical Working Group.
Section 23(a) requires that any mining dispute within the Diwalwal Mineral Reservation be settled by a tribunal of Arbitrators constituted with each opposing party appointing one Arbitrator and the MGB Director or representative acting as Chairman.
Section 23(a) requires arbitration to be conducted pursuant to Republic Act No. 876 (Arbitration Act).

Transitory compliance and continuing validity

Section 24(a) requires all existing Service Contractors operating in Diwalwal mining areas under DAO No. 2002-18 to immediately comply with the provisions of this Administrative Order.
Section 24(a) allows mineral processing plants and related facilities/structures located in Diwalwal mining areas that comply with existing law to continue being utilized by Service Contractors until the Mabatas Area becomes operational.

Separability and repealing effect

Section 25 provides that if any part or section of the Order is declared unconstitutional or invalid by a competent court, the remainder remains in effect.
Section 26 provides that inconsistent orders, rules, and regulations are repealed or modified accordingly.